EXHIBIT 10.2
EMPLOYEE STOCK PURCHASE PLAN
FOR RAVENSWOOD WINERY, INC.
RAVENSWOOD WINERY, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Ravenswood Winery, Inc. by providing eligible employees with the opportunity
to acquire a proprietary interest in the Corporation through participation in a
payroll deduction-based employee stock purchase plan.
Capitalized terms herein shall have the meanings assigned to such terms
in the attached Appendix.
2. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
3. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The maximum number of shares of Common Stock which
may be issued over the term of the Plan shall not exceed 50,000 shares.
B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per Participant on
any one Purchase Date and (iii) the number and class of securities and the price
per share in effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
4. PURCHASE PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive Purchase Periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each Purchase Period shall be six (6) months in duration, unless
otherwise determined by the Plan Administrator prior to the start date of the
Purchase Period, and provided
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that the initial Purchase Period shall commence at the Effective Time and shall
terminate on the last business day of that calendar year. Subsequent Purchase
Periods, each of six (6) months duration, shall commence on the first business
day of each January and July thereafter, unless otherwise designated by the Plan
Administrator. The Plan Administrator shall have complete discretion to change
the start date and the duration of a Purchase Period, provided Eligible
Employees are notified prior to the start date of any Purchase Period for which
such change is to be effective, and provided, further, that no Purchase Period
shall have a duration exceeding twenty-seven (27) months.
5. ELIGIBILITY
A. Each Eligible Employee of a Participating Corporation shall be
eligible to participate in the Plan in accordance with the following provisions:
(i) An individual who is an Eligible Employee on the start
date of any Purchase Period under the Plan shall be eligible to commence
participation in that Purchase Period on such start date.
(ii) An individual who first becomes an Eligible Employee
after the start date of any Purchase Period will not be eligible to commence
participation under the Plan until the start date of the next Purchase Period on
which he/she remains an Eligible Employee.
B. To participate in the Plan for a particular Purchase Period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (which may include a stock purchase agreement and a payroll
deduction authorization form) and file such forms with the Plan Administrator
(or its designate) on or before the start date for the Purchase Period.
6. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Cash Compensation paid to the Participant during that
Purchase Period, up to a maximum of ten percent (10%). The deduction rate so
authorized shall continue in effect for the remainder of the Purchase Period,
except to the extent such rate is changed in accordance with the following
guidelines:
(i) The Participant may, at any time during the Purchase
Period, reduce his or her rate of payroll deduction to become effective as soon
as possible after filing the appropriate form with the Plan Administrator. The
Participant may not, however, effect more than one (1) such reduction per
Purchase Period.
(ii) The Participant may, prior to the commencement of any new
Purchase Period, increase the rate of his or her payroll deduction by filing the
appropriate form with the Plan Administrator. The new rate (which may not exceed
the ten percent (10%) maximum) shall become effective as of the start date of
the Purchase Period following the filing of such form.
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B. Payroll deductions shall begin on the first pay day following the
start date for the Purchase Period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to
the last day of that Purchase Period. The amounts so collected shall be credited
to the Participant's book account under the Plan, but no interest shall be paid
on the balance from time to time outstanding in such account. The amounts
collected from the Participant shall not be held in any segregated account or
trust fund and may be commingled with the general assets of the Corporation and
used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination of
the Participant's purchase right in accordance with the provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan on any
Purchase Date shall neither limit nor require the Participant's acquisition of
Common Stock on any subsequent Purchase Date.
7. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate
purchase right for each Purchase Period in which he or she participates. The
purchase right shall be granted on the start date of the Purchase Period and
shall provide the Participant with the right to purchase shares of Common Stock
upon the terms set forth below. The purchase right shall continue until the end
of the Purchase Period, and shall be automatically exercised on the last
business day of the respective Purchase Period each year (the last business day
of June and the last business day of December) or such other date as may be
selected by the Plan Administrator as the ending date for the Purchase Period).
The Participant shall execute a stock purchase agreement embodying such terms
and such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)), or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised on the respective Purchase Date, and shares of Common
Stock shall accordingly be purchased on behalf of each Participant (other than
any Participant whose payroll deductions have previously been refunded in
accordance with the Termination of Purchase Right provisions below) on each such
Purchase Date. The purchase shall be effected by applying the Participant's
payroll deductions for the Purchase Period ending on such Purchase Date
(together with any carryover deductions from the preceding Purchase Period) to
the purchase of whole shares of Common Stock (subject to the limitation on the
maximum number of shares purchasable per Participant on any one Purchase Date)
at the purchase price in effect for the Participant for that Purchase Date.
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C. PURCHASE PRICE. The purchase price per share at which Common Stock
will be purchased on the Participant's behalf on each Purchase Date shall be
equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per
share of Common Stock on the start date for that Purchase Period or (ii) the
Fair Market Value per share of Common Stock on that Purchase Date.
Notwithstanding the foregoing, the Administrator may establish, with respect to
any Purchase Period, a different purchase price, which shall be no lower than
the purchase price set forth in the preceding sentence, so long as the
Administrator gives all Eligible Employees reasonable notice of such different
purchase price at least sixty (60) days prior to the commencement of such
Purchase Period, in which event the different purchase price so established
shall remain in effect for all subsequent Purchase Periods unless and until
changed again by the Administrator.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock
purchasable by a Participant on each Purchase Date shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the Purchase Period ending with that Purchase Date
(together with any carryover deductions from the preceding Purchase Period) by
the purchase price in effect for the Participant for that Purchase Date.
However, the maximum number of shares of Common Stock purchasable per
Participant on any Purchase Date shall not exceed five hundred (500) shares,
subject to periodic adjustments in the event of certain changes in the
Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the
purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date, or at the option of the Plan
Administrator, may be used to buy fractional shares. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on the
Purchase Date shall be promptly refunded, without interest.
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern
the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next Purchase
Date , terminate his or her outstanding purchase right by filing the appropriate
form with the Plan Administrator (or its designate), and no further payroll
deductions shall be collected from the Participant with respect to the
terminated purchase right. Any payroll deductions collected during the Purchase
Period in which such termination occurs shall, at the Participant's election, be
immediately refunded, without interest, or held for the purchase of shares on
the next Purchase Date. If no such election is made at the time such purchase
right is terminated, then the payroll deductions collected with respect to the
terminated right shall be refunded as soon as possible, without interest.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the Purchase Period
for which the terminated purchase right was granted. In order to resume
participation in any subsequent Purchase Period, such
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individual must re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) on or before the start date for that Purchase
Period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in status) while
his or her purchase right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll deductions for the
Purchase Period in which the purchase right so terminates shall be immediately
refunded; provided that, to the extent permitted by Code Section 423 and the
applicable regulations, upon termination of employment due to death, the
Participant's beneficiaries may elect to purchase the shares that the
accumulated payroll deductions in the Participant's account would purchase at
the date of death. Notwithstanding the foregoing, should the Participant cease
to remain in active service by reason of an approved unpaid leave of absence,
then the Participant shall have the election, exercisable up until the last
business day of the Purchase Period in which such leave commences, to (a)
withdraw all the funds in the Participant's payroll account at the time of the
commencement of such leave or (b) have such funds held for the purchase of
shares at the end of such Purchase Period. In no event, however, shall any
further payroll deductions be added to the Participant's account during such
leave. Upon the Participant's return to active service, his or her payroll
deductions under the Plan shall automatically resume at the rate in effect at
the time the leave began, provided the Participant returns to service prior to
the expiration date of the Purchase Period in which such leave began.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Period in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
Common Stock on the start date for the Purchase Period in which such Corporate
Transaction occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Corporate Transaction. However,
the applicable limitation on the number of shares of Common Stock purchasable
per Participant shall continue to apply to any such purchase.
The Corporation shall use its best efforts to provide at least ten (10)
days prior written notice of the occurrence of any Corporate Transaction, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Common Stock which are to be purchased pursuant to outstanding purchase rights
on any particular date exceed the number of shares then available for issuance
under the Plan, the Plan Administrator shall either (i) make a pro-rata
allocation of the available shares on a uniform and nondiscriminatory basis, in
which case the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded, without interest, or (ii) increase the number of
shares then available for issuance under the Plan, subject to shareholder
approval, by an amount at least sufficient to
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permit the purchase of all shares which are to be purchased pursuant to
outstanding purchase rights on such date.
I. ASSIGNABILITY. During the Participant's lifetime, the purchase right
shall be exercisable only by the Participant and shall not be assignable or
transferable by the Participant.
J. SHAREHOLDER RIGHTS. A Participant shall have no shareholder rights
with respect to the shares subject to his or her outstanding purchase right
until the shares are purchased on the Participant's behalf in accordance with
the provisions of the Plan and the Participant has become a holder of record of
the purchased shares.
8. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than twenty-five thousand dollars
($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market Value of such stock on the date or
dates such rights are granted) for each calendar year such rights are at any
time outstanding.
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue on each successive Purchase Date.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already accrued in
the same calendar year the right to acquire Common Stock under one or more other
purchase rights in an amount equal to twenty-five thousand dollars ($25,000)
worth of Common Stock (determined on the basis of the Fair Market Value of such
stock on the date or dates of grant) for each calendar year such rights were at
any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Period, then the payroll
deductions which the Participant made during that Purchase Period with respect
to such purchase right shall be promptly refunded, without interest.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
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9. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board as of February 1, 1999, and
approved by the shareholders as of February 1, 1999. It shall become effective
at the Effective Time, provided that no purchase rights granted under the Plan
shall be exercised, and no shares of Common Stock shall be issued hereunder,
until the Corporation shall have complied with all applicable requirements of
the 1933 Act (including the registration of the shares of Common Stock issuable
under the Plan on a Form S-8 registration statement filed with the Securities
and Exchange Commission), all applicable listing requirements of any stock
exchange (or the Nasdaq National Market, if applicable) on which the Common
Stock is listed for trading and all other applicable requirements established by
law or regulation. In the event such shareholder approval is not obtained, or
such compliance is not effected, within twelve (12) months after the date on
which the Plan is adopted by the Board, the Plan shall terminate and have no
further force or effect and all sums collected from Participants during the
initial Purchase Period shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest of (i) February 1, 2009, (ii) the date on which all shares
available for issuance under the Plan shall have been sold pursuant to purchase
rights exercised under the Plan or (iii) the date on which all purchase rights
are exercised in connection with a Corporate Transaction. No further purchase
rights shall be granted or exercised, and no further payroll deductions shall be
collected, under the Plan following its termination.
10. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any
time, to become effective immediately following the close of any Purchase
Period. However, the Board may not, without the approval of the Corporation's
shareholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation's capitalization as provided in
Section 3.B hereof, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the
Plan, or (iii) materially modify the requirements for eligibility to participate
in the Plan.
11. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
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C. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict-of-laws rules.
D. The Plan is designed to qualify under Section 423 of the Code.
Payroll deductions will be made on an after-tax basis.
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APPENDIX
The following definitions shall be in effect under the Plan:
A. Board shall mean the Corporation's Board of Directors.
B. Cash Compensation shall mean the (i) regular base salary paid to a
Participant by one or more Participating Companies during such individual's
period of participation in the Plan, plus (ii) all of the following amounts to
the extent paid in cash: overtime payments, bonuses, commissions, profit-sharing
distributions and other incentive-type payments (including, in the case of any
amounts referred to in clause (i) or (ii), any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation or
any Corporate Affiliate). However, Cash Compensation shall not include any
contributions (other than Code Section 401(k) or Code Section 125 contributions)
made on the Participant's behalf by the Corporation or any Corporate Affiliate
to any deferred compensation plan or welfare benefit program now or hereafter
established.
C. Common Stock shall mean the Corporation's Common Stock.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
E. Corporate Affiliate shall mean any parent or subsidiary corporation
of the Corporation (as determined in accordance with Code Section 424), whether
now existing or subsequently established.
F. Corporate Transaction shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation or
dissolution of the Corporation.
G. Corporation shall mean Ravenswood Winery, Inc., a California
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Ravenswood Winery, Inc., which shall by appropriate
action adopt the Plan.
H. Effective Time shall mean the time at which the Underwriting
Agreement is executed and finally priced. Any Corporate Affiliate which becomes
a Participating Corporation after such Effective Time shall designate a
subsequent Effective Time with respect to its employee-Participants.
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I. Eligible Employee shall mean any employee, except any person who is
engaged, on a regularly scheduled basis for fewer than twenty (20) hours per
week or for fewer than five (5) months per calendar year, in the rendition of
personal services to any Participating Corporation as an employee for earnings
considered wages under Code Section 3401(a).
J. Fair Market Value per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National Market or
any successor system. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
(iii) For purposes of the initial offering period which begins
at the Effective Time, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is sold in the initial public offering
pursuant to the Underwriting Agreement.
K. 1933 Act shall mean the Securities Act of 1933, as amended.
L. Participant shall mean any Eligible Employee of a Participating
Corporation who is actively participating in the Plan.
M. Participating Corporation shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Time are listed in
attached Schedule A.
N. Plan shall mean the Corporation's Employee Stock Purchase Plan, as
set forth in this document.
O. Plan Administrator shall mean the Board or, if established, the
committee of two (2) or more Board members appointed by the Board to administer
the Plan.
P. Purchase Date shall mean the last business day of each Purchase
Period.
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Q. Purchase Period shall mean each successive period at the end of
which there shall be purchased shares of Common Stock on behalf of each
Participant.
R. Stock Exchange shall mean either the American Stock Exchange or the
New York Stock Exchange.
S. Underwriting Agreement shall mean the agreement between the
Corporation and the underwriter managing the initial public offering of the
Common Stock.
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SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
Ravenswood Winery, Inc.
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