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AMENDED AND RESTATED STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made and entered into as of the
4th day of February, 1998, and amended and restated as of April 17, 1998, by and
between Saratoga Beverage Group, Inc. (the "Company"), a Delaware corporation,
and Xxxx X. Xxxx (the "Optionee"), residing at 000 Xxxxxx Xxxx, Xxxxx Xxxxxx,
Xxx Xxxxxx 00000.
The Board of Directors (the "Board") of the Company adopted on February 4, 1998
(the "Grant Date") a resolution granting the Optionee a stock option (the
"Option") to purchase 200,000 shares (the "Shares") of the Company's Class A
common stock, par value $.01 per share (the "Common Stock"), for the price, on
the terms and subject to the conditions set forth in this Agreement. The Option
was not granted under the Company's 1993 Stock Option Plan. In connection with
the grant of the Option, the Optionee waived his rights to receive stock options
under the Company's 1993 Stock Option Plan.
On April 17, 1998, the Company and the Optionee entered into a letter agreement
whereby the Optionee and the Company agreed (i) to reduce the number of Shares
subject to the Option from 200,000 to 75,000, all of which shall be vested
immediately, (ii) to change the Expiration Date (as hereinafter defined) to
February 3, 2003 from February 3, 2008, (iii) to delete the requirement that the
Optionee continue to be a director in order to exercise the Option and to delete
references to the Optionee continuing as a director of the Company and (iv) to
change the requirements for Piggyback Registration (as hereinafter defined).
This Agreement reflects the above changes.
The Option is not intended to satisfy the requirements for an incentive stock
option (an "ISO") under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Company makes no representations or warranties as to
the income, estate or other tax consequences to the Optionee of the grant or
exercise of the Option or the sale or other disposition of the Shares acquired
pursuant to the exercise thereof.
1. (a) The price at which the Optionee shall have the right to purchase
the 75,000 Shares under this Agreement is $2.875 per Share, subject to
adjustment as provided in Paragraph 4 below.
(b) The entire Option shall be exercisable immediately. In no event
shall any Shares be purchasable under this Agreement after February 3,
2003 (the "Expiration Date").
2. [Intentionally deleted]
3. (a) Subject to Section 422 of the Code, neither the Option nor any
right under the Option shall be assignable, alienable, saleable or
transferable by the Optionee otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder; provided, however, that,
if so determined by the Board or a committee thereof,
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the Optionee may, in the manner established by the Board or a committee
thereof in its sole discretion, designate a beneficiary or
beneficiaries to exercise the rights of the Optionee, and to receive
any property distributable, with respect to any Option upon the death
of the Optionee.
(b) The Option shall not be pledged, alienated, attached, or otherwise
encumbered or transferred in any manner except to the extent that the
Option may be exercised by an executor or administrator or beneficiary
as provided in subparagraph 3(a) above, and any purported pledge,
alienation, attachment, encumbrance, or transfer thereof shall be void
and unenforceable against the Company. The Option may be exercised,
during the lifetime of the Optionee, only by the Optionee or his duly
appointed guardian or legal representative.
4. (a) In the event that the Board or a committee thereof shall determine
that the outstanding shares of Common Stock are affected by any (i)
subdivision or consolidation of shares, (ii) dividend or other
distribution (whether in the form of cash, Shares, other securities, or
other property) or (iii) recapitalization or other capital adjustment
of the Company, such that an adjustment is determined to be appropriate
in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available hereunder, then the
Board or a committee thereof shall, in such manner as it may deem
necessary to prevent dilution or enlargement of the benefits or
potential benefits intended to be made hereunder, adjust any or all of
(x) the number and type of Shares which may be subject to the Option,
(y) the number and type of Shares subject to the unexercised portion of
the Option, and (z) the exercise price per Share with respect to the
Option; provided, however, that the exercise price per Share shall not
be adjusted below the par value per Share of the Common Stock. In
computing any adjustment under this paragraph, any fractional share
shall be eliminated.
(b) In the event of the dissolution or liquidation of the Company, or
in the event of a Change in Control (as defined in the Company's 1983
Stock Option Plan), the Optionee shall have the right, immediately
prior to the record date for the determination of stockholders entitled
to participate in such dissolution, liquidation or Change in Control,
to exercise the Option, in whole or in part, without regard to any
installment provisions contained in subparagraph 1(b). In such event,
the Company will mail or cause to be mailed to the Optionee a notice
specifying the date of such dissolution, liquidation or Change in
Control. Such notice shall be mailed at least ten (10) days prior to
the date therein specified to the address of the Optionee specified on
page 1 of this Agreement or to such other address as the Optionee
delivers or transmits by registered or certified mail to the Secretary
of the Company at its principal office.
5. The Option shall be exercised when written notice of such exercise,
signed by the person entitled to exercise the Option, has been
delivered or transmitted by registered or certified mail, to the
Secretary of the Company at its principal office. Said written notice
shall specify the number of Shares purchasable under
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the Option which such person then wishes to purchase and shall be
accompanied by such documentation, if any, as may be required by the
Company as provided in Paragraph 7 below and be accompanied by payment
of the aggregate Option price. Such payment of the aggregate Option
price shall be, without limitation, in the form of (i) cash, Shares,
outstanding Options or other consideration, or any combination thereof,
having a Fair Market Value on the exercise date equal to the exercise
price of the Option or portion thereof being exercised or (ii) a
broker-assisted cashless exercise program established by the Board or a
committee thereof. Delivery of said notice and such documentation shall
constitute an irrevocable election to purchase the Shares specified in
said notice and the date on which the Company receives said notice and
documentation shall, subject to the provisions of Paragraph 7, be the
date as of which the Shares so purchased shall be deemed to have been
issued. The person entitled to exercise the Option shall not have the
right or status as a holder of the Shares to which such exercise
relates prior to receipt by the Company of such payment, notice and
documentation. For purposes of this Agreement, "Fair Market Value"
shall mean, with respect to Shares or other securities, (i) the closing
price per Share of the Shares on the principal exchange on which the
Shares are then trading, if any, on such date, or, if the Shares were
not traded on such date, then on the next preceding trading day during
which a sale occurred; or (ii) if the Shares are not traded on an
exchange but are quoted on Nasdaq or a successor quotation system, (1)
the last sales price (if the Shares are then listed on the Nasdaq
National Market) or (2) the mean between the closing representative bid
and asked prices (in all other cases) for the Shares on such date as
reported by Nasdaq or such successor quotation system; or (iii) if the
Shares are not publicly traded on an exchange and not quoted on Nasdaq
or a successor quotation system, the mean between the closing bid and
asked prices for the Shares on such date as determined in good faith by
the Committee; or (iv) if the Shares are not publicly traded, the fair
market value established by the Committee acting in good faith.
6. (a) In combination with or in substitution for cash withholding or any
other legal method of satisfying federal and state withholding tax
liability, the Optionee may elect to have Shares withheld by the
Company in order to satisfy federal and state withholding tax liability
(a "share withholding election"); provided, however, that (i) the Board
or a committee thereof shall not have revoked its advance approval of
the Optionee's share withholding election; and (ii) the share
withholding election is made on or prior to the date on which the
amount of withholding tax liability is determined (the "Tax Date"). If
the Optionee elects within thirty (30) days of the date of exercise to
be subject to withholding tax on the exercise date pursuant to the
provisions of Section 83(b) of the Code, then the share withholding
election may be made during such thirty (30) day period.
Notwithstanding the foregoing, the Optionee may make a share
withholding election only if the following additional conditions are
met: (i) the share withholding election is made no sooner than six (6)
months after the date of grant of the Option; and (ii) the share
withholding election is made (x) at least six
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(6) months prior to the Tax Date, or (y) during the period beginning on
the third business day following the date of release of the Company's
quarterly or annual financial results and ending on the twelfth
business day following such date.
(b) A share withholding election shall be deemed made when written
notice of such election, signed by the Optionee, has been
delivered or transmitted by registered or certified mail to the
Secretary of the Company at its principal office. Delivery of such
notice shall constitute an irrevocable election to have Shares
withheld.
(c) If the Optionee has made a share withholding election pursuant to
this Section 6; and (i) within thirty (30) days of the date of
exercise of the Option, the Optionee elects pursuant to the
provisions of Section 83(b) of the Code to be subject to
withholding tax on the date of exercise of the Option, then the
Optionee will be unconditionally obligated to immediately tender
back to the Company the number of Shares having an aggregate Fair
Market Value equal to the amount of tax required to be withheld
plus cash for any fractional amount, together with written notice
to the Company informing the Company of the Optionee's election
pursuant to Section 83(b) of the Code; or (ii) if the Optionee has
not made an election pursuant to the provisions of Section 83(b)
of the Code, then on the Tax Date, such Optionee will be
unconditionally obligated to tender back to the Company the number
of Shares having an aggregate Fair Market Value equal to the
amount of tax required to be withheld plus cash for any fractional
amount.
7. The Board or a committee thereof may require as a condition to the
right to exercise the Option hereunder that the Company receive from
the person exercising the Option, representations, warranties and
agreements, at the time of any such exercise, to the effect that the
Shares are being purchased for investment only and without any present
intention to sell or otherwise distribute such Shares and that the
Shares will not be disposed of in transactions which, in the opinion of
counsel to the Company, would violate the registration provisions of
the Securities Act of 1933, as then amended (the "Securities Act"), and
the rules and regulations thereunder. The certificate issued to
evidence such Shares shall bear appropriate legends summarizing such
restrictions on the disposition thereof.
8. (a) The Company shall, in connection with its presently contemplated
registration statement on Form S-8 under the Securities Act, cause to
register all 75,000 Shares which are the subject of the Option (the
"Piggyback Registration"), which Piggyback Registration shall be
effected prior to July 15, 1998.
(b) The Optionee may not participate in any registration initiated as a
Piggyback Registration which is underwritten for the benefit of the
Company unless the Optionee (i) agrees to sell his Shares on the basis
provided in any underwriting agreements approved by the Company; (ii)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting agreements and which are
customary with industry practice;
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and (iii) agrees that if an underwriter advises the Company in writing
that the number of shares proposed to be sold by the Company and/or the
Optionee is greater than the number of shares of Common Stock which the
underwriter believes is feasible to sell at that time, at the price and
in the terms approved by the Company, then the underwriter may exclude
some or all of the Shares from such Piggyback Registration. The Company
shall advise the Optionee of the limitation, and that the number of
shares of Shares to be offered by the Optionee will be reduced to the
number recommended by the underwriter.
(c) In any registration initiated as a Piggyback Registration, whether
or not the registration statement becomes effective, the Company will
pay or cause to be paid all costs, fees and expenses in connection
therewith, including, without limitation, the Company's legal and
accounting fees, printing expenses and "blue sky" fees and expenses,
except that the Company shall not pay for (i) underwriting discounts
and commissions, (ii) state transfer taxes, (iii) brokerage
commissions, (iv) fees and expenses of counsel and accountants for the
Optionee and (v) blue sky fees and expenses in jurisdictions where the
Company is not currently registered or qualified.
(d) To the extent not inconsistent with applicable law, the Optionee
agrees not to effect any public sale or distribution of Common Stock,
including a sale pursuant to Rule 144 or in reliance on any other
exemption from registration under the Securities Act, during the
fourteen (14) days prior to, and during the ninety (90) days beginning
on, the effective date of a registration statement that includes Shares
(except as part of such registration), but only if and to the extent
requested in writing (with reasonable prior written notice) by the
underwriter(s) in the case of an underwritten public offering by the
Company of securities similar to the Shares.
(e) The Company and the Optionee agree to indemnify and hold harmless
each other (and, in the case of the Company, its directors and officers
and each person who controls the Company (within the meaning of the
Securities Act)) against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) (collectively,
"Losses") arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any registration statement with
respect to a Piggyback Registration, any amendment or supplement
thereto, any prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided, however, that the Optionee shall not be indemnified for
Losses insofar as such Losses arise out of or are based upon any such
untrue statement or omission based upon information furnished in
writing to the Company by or on behalf of the Optionee (in his
individual capacity) expressly for use therein; provided further,
however, that in the event the prospectus shall have been amended or
supplemented and copies thereof, as so amended or supplemented, shall
have been furnished to the Optionee prior to the confirmation of any
sales of Registrable Securities, such indemnity with respect to the
prospectus shall not inure to the benefit of the Optionee if the person
asserting such Loss did not, at or prior to the confirmation of the
sale of the Registrable Securities to such person, receive a copy of
the prospectus, as so amended or supplemented, and the untrue statement
or omission of a material fact contained in the prospectus was
corrected in the prospectus, as so amended or supplemented.
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9. The Option shall be exercisable in accordance with the terms hereof
even if (i) any ISO to purchase Common Stock in the Company, in any
parent or subsidiary of the Company or in any predecessor corporation
of such corporations, was granted to the Optionee and (ii) such
previously granted ISO remains outstanding. For purposes of this
Paragraph, an ISO shall be treated as outstanding until such option is
exercised in full or expires by reason of lapse of time.
10. All certificates for Shares delivered pursuant to any Option or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Board or a committee thereof may deem
advisable under the rules, regulations, and other restrictions of the
Securities and Exchange Commission, any stock exchange upon which such
Shares or other securities are then listed, and any applicable federal
or state securities laws, and the Board or a committee thereof may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
11. This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware and applicable federal law. Subject to
subparagraph 3(a) hereof, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors or assigns, as the case may
be.
IN WITNESS WHEREOF, the parties have witnessed this Agreement to be
duly executed and delivered as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxxx Xxxxxx
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Xxxx X. Xxxx Xxxxx Xxxxxx
President and Chief Executive
Officer
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