EXHIBIT 10.1
1999 EQUITY INCENTIVE PLAN
FOR RAVENSWOOD WINERY, INC.
RAVENSWOOD WINERY, INC.
1999 EQUITY INCENTIVE PLAN
SECTION 1. GENERAL
1.1. Purpose. The Ravenswood 1999 Equity Incentive Plan (the "Plan")
has been established by Ravenswood Winery, Inc. (the "Company") to (i) attract
and retain persons eligible to participate in the Plan; (ii) motivate
Participants, by means of appropriate incentives, to achieve long-range goals;
(iii) provide incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further align Participants' interests
with those of the Company's other shareholders through compensation that is
based on the Company's common stock; and thereby promote the long-term financial
interest of the Company and the Subsidiaries, including the growth in value of
the Company's equity and enhancement of long-term shareholder return.
1.2. Participation. Subject to the terms and conditions of the Plan,
the Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards under
the Plan, and thereby become "Participants" in the Plan. In the discretion of
the Committee, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a Participant.
Awards may be granted as alternatives to or in replacement of awards outstanding
under the Plan, or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Subsidiary).
1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 5 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 2 of the Plan).
SECTION 2. DEFINED TERMS
In addition to the other definitions contained herein, the following
definitions shall apply:
Award. The term "Award" shall mean any award or benefit granted under
the Plan, including, without limitation, the grant of Options, Stock Unit
Awards, Restricted Stock Awards, Restricted Stock Unit Awards and Performance
Share Awards.
Board. The term "Board" shall mean the Board of Directors of the
Company.
Change of Control. The term "Change of Control" shall mean:
(i) a merger or consolidation in which securities possessing
more than 50% of the total combined voting power of the Company's outstanding
securities are transferred to one
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or more persons who were not stockholders of the Company immediately before such
merger or consolidation; or
(ii) the sale or transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its
sole purpose is to change the state of the Company's incorporation or to create
a holding company that will be owned in substantially the same propostions by
the persons who held the Company's securities immediately before such
transaction.
Change of Control Value. The term "Change of Control Value" means the
amount determined in clause (i), (ii) or (iii), whichever is applicable, as
follows: (i) the per share price offered to shareholders of the Company in any
merger, consolidation, sale of assets or dissolution transaction, (ii) the price
per share offered to shareholders of the Company in any tender offer or exchange
offer whereby a Change of Control takes place or (iii) if a Change of Control
occurs other than as described in clause (i) or clause (ii), the fair market
value per share determined by the Board as of the date determined by the Board
to be the date of cancellation and surrender of an Option. If the consideration
offered to shareholders of the Company in any Change of Control consists of
anything other than cash, the Board shall determine the fair cash equivalent of
the portion of the consideration offered which is other than cash.
Code. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include reference to any
successor provision of the Code.
Eligible Individual. The term "Eligible Individual" shall mean any
employee of the Company or a Subsidiary, and any consultant or other person
providing services to the Company or a Subsidiary. An Award may be granted to an
employee, in connection with hiring, retention or otherwise, prior to the date
the employee first performs services for the Company or the Subsidiaries,
provided that such Awards shall not become vested prior to the date the employee
first performs such services.
Employee. The term "Employee" shall mean any individual who is a
common-law employee of the Company or Subsidiary.
Fair Market Value. For purposes of determining the "Fair Market Value"
of a share of Stock as of any date, the following rules shall apply:
(i) If the principal market for the Stock is a national
securities exchange or the Nasdaq stock market, then the "Fair Market Value" as
of that date shall be the mean between the lowest and highest reported sale
prices of the Stock on the prior trading date on the principal exchange on which
the Stock is then listed or admitted to trading.
(ii) If sale prices are not available or if the principal
market for the Stock is not a national securities exchange and the Stock is not
quoted on the Nasdaq stock market, the
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average between the highest bid and lowest asked prices for the Stock on such
prior trading day as reported on the NASDAQ OTC Bulletin Board Service or by the
National Quotation Bureau, Incorporated or a comparable service.
Participant. The term "Participant" shall mean any individual granted
awards or options under the Plan.
Stock. The term "Stock" shall mean shares of common stock of the
Company.
Subsidiaries. The term "Subsidiary" shall mean any company or other
entity in which the Company holds 50% or more of the voting power of such other
company or entity.
SECTION 3. OPTIONS
3.1. Definitions.
(a) The grant of an "Option" entitles the Participant to
purchase shares of Stock at an Exercise Price established by the Committee.
Options granted under this Section 3 may be either Incentive Stock Options
("ISOs") or Non-Qualified Options ("NQOs"), as determined in the discretion of
the Committee. An "ISO" is an Option that is intended to satisfy the
requirements applicable to an "incentive stock option" described in section
422(b) of the Code. An "NQO" is an Option that is not intended to be an
"incentive stock option" as that term is described in section 422(b) of the
Code.
(b) The term "Optionee" shall mean any Participant who
receives an Option under this Section 3.
3.2. Exercise Price. The "Exercise Price" of each Option granted under
this Section 3 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option is granted; except
that the Exercise Price shall not be less than 100% of the Fair Market Value of
a share of Stock on the date of grant.
3.3. Exercise. An Option shall be exercisable in accordance with such
terms and conditions and during such periods as may be established by the
Committee.
3.4. Payment of Option Exercise Price. The payment of the Exercise
Price of an Option granted under this Section 3 shall be subject to the
following:
(a) Subject to the following provisions of this subsection
3.4, the full Exercise Price for shares of Stock purchased upon the exercise of
any Option shall be paid at the time of such exercise.
(b) The Exercise Price shall be payable in cash or by
tendering, by either actual delivery of shares or by attestation, shares of
Stock owned by the Participant and acceptable to the Committee, and valued at
Fair Market Value as of the day of exercise, or in any combination thereof, as
determined by the Committee.
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(c) The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares) acquired
upon exercise of the Option and remit to the Company a sufficient portion of the
sale proceeds to pay the entire Exercise Price and any tax withholding resulting
from such exercise.
3.5. Settlement of Award. Shares of Stock delivered pursuant to the
exercise of an option shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award Agreement.
The Committee, in its discretion, may impose such conditions, restrictions and
contingencies with respect to shares of Stock acquired pursuant to the exercise
of an Option as the Committee determines to be desirable.
3.6 Vesting. The Option Agreement for each individual Option grant
shall provide that the Option subject to such Option Agreement shall become
exercisable ("vest") at a rate to be determined by the Committee or by the Board
at the time of grant. The Committee or the Board may also provide for the
acceleration of vesting in certain circumstances.
SECTION 4. OTHER STOCK AWARDS
4.1. Definitions.
(a) A "Stock Unit" Award is the grant of a right to receive
shares of Stock in the future.
(b) A "Performance Share" Award is a grant of a right to
receive shares of Stock or Stock Units which is contingent on the achievement of
performance or other objectives during a specified period.
(c) A "Restricted Stock" Award is a grant of shares of Stock,
and a "Restricted Stock Unit" Award is a grant of a right to receive shares of
Stock in the future, with such shares of Stock or right to future delivery of
such shares of Stock subject to a risk of forfeiture or other restrictions that
will lapse upon the achievement of one or more goals relating to completion of
service by the Participant, or achievement of performance or other objectives,
as determined by the Committee.
4.2. Restrictions on Stock Awards. Each Stock Unit Award, Restricted
Stock Award, Restricted Stock Unit Award and Performance Share Award shall be
subject to the following:
(a) Any such Award shall be subject to such conditions,
restrictions and contingencies as the Committee shall determine.
(b) The Committee may designate whether any such Award being
granted to any Participant is intended to be "performance-based compensation" as
that term is used in section 162(m) of the Code. Any such Awards designated as
intended to be "performance-based compensation" shall be conditioned on the
achievement of one or more performance goals. Each
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performance goal that may be used by the Committee for such Awards shall
identify one or more business criteria that is to be monitored during the
relevant period. Such criteria may include, among other things, any of the
following: funds from operations per share; return on net assets; operating
ratios; cash flow; shareholder return; revenue growth; net income; earnings per
share; debt reduction; return on investment; or revenue.
(c) The Committee shall determine the target level of
performance that must be achieved with respect to each criterion that is
identified in the performance goal in order for a performance goal to be treated
as attained.
For Awards intended to be "performance-based compensation,"
the grant of the Awards and the establishment of the performance goals shall be
made during the period required under Code section 162(m).
SECTION 5. OPERATION AND ADMINISTRATION
5.1. Effective Date. The Plan shall be effective as of February 1, 1999
(the "Effective Date"). The Plan shall be unlimited in duration and, in the
event of Plan termination, shall remain in effect as long as any Awards under it
are outstanding; provided, however, that, to the extent required by the Code, no
ISO may be granted under the Plan on a date that is more than ten years from the
date the Plan is adopted or, if earlier, the date the Plan is approved by
shareholders.
5.2. Shares Subject to Plan. The shares of Stock for which Awards may
be granted under the Plan shall be subject to the following:
(a) Subject to the following provisions of this subsection
5.2, the maximum number of shares of Stock that may be delivered to Participants
and their beneficiaries under the Plan shall be 500,000.
(b) To the extent any shares of Stock covered by an Award are
not delivered to a Participant or beneficiary because the Award is forfeited,
such shares shall not be deemed to have been delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan.
(c) If the exercise price of any stock option granted under
the Plan is satisfied by tendering shares of Stock to the Company (by either
actual delivery or by attestation), only the number of shares of Stock issued
net of the shares of Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan.
(d) Subject to paragraph 5.2(e), the following additional
maximums are imposed under the Plan.
(i) The maximum number of shares of Stock that may be
issued as Options intended to be ISOs shall be 500,000.
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(ii) The maximum number of shares that may be covered
by Awards granted to any one individual pursuant to Section 3 (relating to
Options) shall be 200,000 during the duration of the Plan, subject to adjustment
by the Board or the Committee.
(e) In the event of a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
Committee may adjust Awards to preserve the benefits or potential benefits of
the Awards. Action by the Committee may include: (i) adjustment of the number
and kind of shares which may be delivered under the Plan; (ii) adjustment of the
number and kind of shares subject to outstanding Awards; (iii) adjustment of the
Exercise Price of outstanding Options; and (iv) any other adjustments that the
Committee determines to be equitable.
5.3. General Restrictions. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any shares of Stock under the Plan or
make any other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933 and state securities
laws), and the applicable requirements of any securities exchange or similar
entity.
(b) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by applicable
law or the applicable rules of any stock exchange.
5.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock which the Participant already owns, or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the Plan.
5.5. Use of Shares. Subject to the overall limitation on the number of
shares of Stock that may be delivered under the Plan, the Committee may use
available shares of Stock as the form of payment for compensation, grants or
rights earned or due under any other compensation plans or arrangements of the
Company or a Subsidiary, including the plans and arrangements of the Company or
a Subsidiary assumed in business combinations.
5.6. Dividends and Dividend Equivalents. An Award (including, without
limitation, an Option) may provide the Participant with the right to receive
dividend payments or dividend equivalent payments with respect to Stock subject
to the Award (both before and after the Stock subject to the Award is earned,
vested or acquired), which payments may be either made currently or credited to
an account for the Participant, and may be settled in cash or Stock as
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determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.
5.7. Payments. Any Award settlement, including payment deferrals, may
be subject to such conditions, restrictions and contingencies as the Committee
shall determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred Stock equivalents.
Each Subsidiary shall be liable for payment of cash due under the Plan with
respect to any Participant to the extent that such benefits are attributable to
the services rendered for that Subsidiary by the Participant. Any disputes
relating to liability of a Subsidiary for cash payments shall be resolved by the
Committee.
5.8. Transferability. Except as otherwise provided by the Committee,
Awards under the Plan are not transferable except as designated by the
Participant by will or by the laws of descent and distribution.
5.9. Form and Time of Elections. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
5.10. Agreement With Company. An Award under the Plan shall be subject
to such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not, require that the Participant
shall sign a copy of such document. Such document is referred to in the Plan as
an "Award Agreement" regardless of whether any Participant signature is
required.
5.11. Action by Company or Subsidiary. Any action required or permitted
to be taken by the Company or any Subsidiary shall be by resolution of its board
of directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.
5.12. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural,
and the plural shall include the singular.
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5.13. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by
reason of participation in the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Subsidiary whatsoever,
including, without limitation, any specific funds, assets or other property
which the Company or any Subsidiary, in their sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the Stock or amounts, if any, payable under the Plan,
unsecured by any assets of the Company or any Subsidiary, and nothing contained
in the Plan shall constitute a guarantee that the assets of the Company or any
Subsidiary shall be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and
selection as a Participant will not give any participating employee the right to
be retained in the employ of the Company or any Subsidiary, nor any right or
claim to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan. Except as otherwise provided in the Plan,
no Award under the Plan shall confer upon the holder thereof any rights as a
shareholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.
5.14. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
SECTION 6. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, the Committee or Board
shall, in its sole discretion and without the consent or approval of any
Participant, have the power to take any action, including, but not limited to
the following:
(a) accelerate the time at which Options then outstanding may
be exercised so that such Options may be exercised in full for a limited period
of time on or before a specified date (before or after such Change in Control)
fixed by the Board, after which specified date all unexercised Options and all
rights of Optionees thereunder shall terminate;
(b) require the mandatory surrender to the Company by selected
Optionees of some or all of the outstanding Options held by such Optionees
(irrespective of whether such Options are then exercisable under the provisions
of the Plan) as of a date (before or after such Change in Control) specified by
the Committee or Board, in which event the Board shall thereupon cancel such
options and pay to each Optionee an amount of cash per share equal to the
excess, if any, of the Change of Control Value of the shares subject to such
Option over the exercise price(s) under such Options for such shares;
(c) make such adjustments to Options then outstanding as the
Board deems appropriate to reflect such Change of Control (provided, however,
that the Board may determine in its sole discretion that no adjustment is
necessary to Options then outstanding);
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(d) provide that thereafter upon any exercise of an Option
theretofore granted the Optionee shall be entitled to purchase under such
Option, in lieu of the number of shares of Common Stock as to which such Option
shall then be exercisable, the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the
Optionee would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets or plan of liquidation and dissolution
if, immediately prior to such merger, consolidation or sale of assets or any
distribution in liquidation and dissolution of the Company, the Optionee had
been the holder of record of the number of shares of Common Stock then covered
by such Option; or
(e) cancel the Options granted if the Fair Market Value of the
Common Stock underlying the Options is below the Option exercise price.
SECTION 7. COMMITTEE
7.1. Administration. The authority to control and manage the operation
and administration of the Plan may be vested in a committee (the "Committee") in
accordance with this Section 7. The Committee shall be selected by the Board,
and shall consist solely of two or more members of the Board. If the Committee
does not exist, or for any other reason determined by the Board, the Board may
take any action under the Plan that would otherwise be the responsibility of the
Committee.
7.2. Powers of Committee. The Committee's administration of the Plan
shall be subject to the following:
(a) Subject to the provisions of the Plan, the Committee will
have the authority and discretion to select from among the Eligible Individuals
those persons who shall receive Awards, to determine the time or times of
receipt, to determine the types of Awards and the number of shares covered by
the Awards, to establish the terms, conditions, performance criteria,
restrictions and other provisions of such Awards, and (subject to the
restrictions imposed by Section 8) to cancel or suspend Awards.
(b) To the extent that the Committee determines that the
restrictions imposed by the Plan preclude the achievement of the material
purposes of the Awards in jurisdictions outside the United States, the Committee
will have the authority and discretion to modify those restrictions as the
Committee determines to be necessary or appropriate to conform to applicable
requirements or practices of jurisdictions outside of the United States.
(c) The Committee will have the authority and discretion to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any Award
Agreement made pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the Plan.
(d) Any interpretation of the Plan by the Committee and any
decision made by it under the Plan is final and binding on all persons.
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(e) In controlling and managing the operation and
administration of the Plan, the Committee shall take action in a manner that
conforms to the articles and bylaws of the Company and applicable corporate law.
7.3. Delegation by Committee. Except to the extent prohibited by
applicable laws (including, without limitation, the requirements of of the
Securities Act of 1933 and state securities laws) or the applicable requirements
of any securities exchange or similar entity, the Committee may allocate all or
any portion of its responsibilities and powers to any one or more of its members
and may delegate all or any part of its responsibilities and powers to any
person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
7.4. Information to be Furnished to Committee. The Company and
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Subsidiaries as to an employee's or Participant's employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.
SECTION 8. AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments pursuant to
subsection 5.2(e) shall not be subject to the foregoing limitations of this
Section 8.
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