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, 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 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.
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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 (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; and (iii) agrees
that if an underwriter advises the Company in writing that the number of shares
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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.
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
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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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