GOLDEN STATE VINTNERS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is entered into
as of _________________, 1998 by and between Golden State Vintners, Inc., a
Delaware corporation (the "Company"), and _______________________ ("Optionee")
pursuant to the Golden State Vintners, Inc. 1998 Director Stock Option Plan (the
"Plan"). All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Plan.
R E C I T A L S:
A. Optionee is a non-employee member of the Board of Directors of the
Company (the "Board") or of Golden State Vintners, a California corporation and
wholly-owned subsidiary of the Company (the "Subsidiary").
B. The Company desires to grant Optionee the right to purchase shares of
the Company's Class K Common Stock, par value $.01 per share (the "Class K
Common Stock"), pursuant to the terms and conditions of this Agreement and the
Plan.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the covenants hereinafter set forth,
the parties agree as follows:
1. OPTION; NUMBER OF SHARES. The Company hereby grants to Optionee the
right (the "Option") to purchase up to a maximum of __________ shares (the
"Shares") of Class K Common Stock at a price of $________ per share (the "Option
Price") to be paid in accordance with Section 6 hereof. This Option and the
right to purchase all or any portion of the Shares are subject to the terms and
conditions stated in this Agreement and in the Plan.
2. VESTING CRITERIA. The Option shall vest and become exercisable on the
first anniversary of the date of grant, provided that Optionee has remained in
continuous service as a director of the Company or the Subsidiary for the
preceding twelve (12)-month period and is a non-employee directors of the
Company or the Subsidiary on the applicable anniversary date.
3. TERM OF AGREEMENT. This Option, and Optionee's right to exercise this
Option, shall terminate when the first of the following occurs: (a) termination
pursuant to
Sections 4(d)(ii), 4(d)(iii) or 4(d)(iv) of the Plan; or (b) the expiration of
ten (10) years from the date hereof.
4. TERMINATION OF SERVICE OR OTHER RELATIONSHIP. The termination for any
reason of Optionee's service or other relationship with the Company and the
Subsidiary shall not accelerate the vesting of the Option or affect the number
of Shares with respect to which the Option may be exercised, and this Option may
only be exercised with respect to that number of Shares which could have been
purchased under the Option had the Option been exercised by Optionee on the date
of such termination.
5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of Optionee under this
Agreement may not be assigned or transferred except by will, by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by such Optionee, provided that in the event of disability (within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended) of
Optionee, a designee of Optionee (or the Optionee's legal representative if
Optionee has not designated anyone) may exercise the Option on behalf of
Optionee (provided the Option would have been exercisable by Optionee) until the
right to exercise the Option expires pursuant to Section 3 hereof. Any attempt
to sell, pledge, assign, hypothecate, transfer or otherwise dispose of the
Option in contravention of this Agreement or the Plan shall be void and shall
have no effect. If Optionee should die while Optionee is engaged in an
employment or other relationship with the Company and/or any Subsidiary, and
provided Optionee's rights hereunder shall have vested, in whole or in part,
pursuant to Section 2 hereof, Optionee's designee, legal representative, or
legatee, the successor trustee of Optionee's inter vivos trust or the person who
acquired the right to exercise the Option by reason of the death of Optionee
(individually, a "Successor") shall succeed to Optionee's rights under this
Agreement. After the death of Optionee, only a Successor may exercise the
Option.
6. EXERCISE OF OPTION. On or after the vesting of the Option in
accordance with Section 2 hereof and until termination of the Option in
accordance with Section 3 hereof, the Option may be exercised by Optionee (or
such other person specified in Section 5 hereof) to the extent exercisable as
determined under Section 2 hereof, upon delivery of the following to the Company
at its principal executive offices:
(a) a written notice of exercise which identifies this Agreement
and states the number of Shares then being purchased, provided that in no event
shall an Option be exercisable for a fractional share;
(b) a (i) check, (ii) cash, (iii) other shares which have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the shares as to which the Option shall be exercised and which have been owned
by the Non-Employee Director for at least six (6) months at the time of
exercise, (iv) in the event the shares of the Company's
2.
Common Stock are publicly traded, delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company the amount of proceeds required to pay the exercise price, or (v)
any combination of the foregoing methods of payment in the amount of the
aggregate Option Price (or payment of the aggregate Option Price in such other
form of lawful consideration as the Committee may approve from time to time
under the provisions of Section 8 of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by Optionee in connection with the exercise, in whole or in part, of the Option
(unless the Company and Optionee shall have made other arrangements for
deductions or withholding from Optionee's wages, bonus or other income paid to
Optionee by the Company or any Subsidiary, provided such arrangements satisfy
the requirements of applicable tax laws); and
(d) a written representation and undertaking, if requested by the
Company pursuant to Section 7(b) hereof, in such form and substance as the
Company may require, setting forth the investment intent of Optionee, or a
Successor, as the case may be, and such other agreements, representations and
undertakings as described in the Plan.
7. REPRESENTATIONS AND WARRANTIES OF OPTIONEE.
(a) Optionee represents and warrants that the Option is being
acquired by Optionee for Optionee's personal account, for investment purposes
only, and not with a view to the distribution, resale or other disposition
thereof.
(b) Optionee acknowledges that the Company may issue Shares upon
the exercise of the Option without registering such securities under the Act on
the basis of certain exemptions from such registration requirement.
Accordingly, Optionee agrees that Optionee's exercise of the Option may be
expressly conditioned upon Optionee's delivery to the Company of such
representations and undertakings as the Company may reasonably require in order
to secure the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present intention
of selling or otherwise disposing of such Shares.
(c) Optionee acknowledges receipt of this Agreement granting the
Option, and the Plan, and understands that all rights and liabilities connected
with the Option are set forth herein and in the Plan.
8. NO RIGHTS AS A STOCKHOLDER. Optionee shall have no rights as a
stockholder of any shares of Class K Common Stock issuable upon exercise of the
Option until a certificate
3.
evidencing such shares shall have been issued to the Optionee, and no adjustment
shall be made for dividends or distributions or other rights in respect of any
share for which the record date is prior to the date upon which the Optionee
shall become the holder of record thereof, except as may be provided under
Section 6(b) of the Plan.
9. LIMITATION OF COMPANY'S LIABILITY FOR NONISSUANCE. Inability of the
Company to obtain, from any regulatory body having jurisdiction, authority
reasonably deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares of Common Stock hereunder and under the Plan
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
10. CONFIDENTIALITY. Optionee agrees to hold in the strictest of
confidence all material information, including without limitation all financial
information, provided to Optionee by the Company, and further agrees not to use
such information for any purpose adverse to the Company, not to duplicate such
information or to deliver such information to any other person.
11. THIS AGREEMENT SUBJECT TO PLAN. This Agreement is made under the
provisions of the Plan and shall be interpreted in a manner consistent with it.
To the extent that any provision in this Agreement is inconsistent with the
Plan, the provisions of the Plan shall control. A copy of the Plan is available
to Optionee at the Company's principal executive offices upon request and
without charge. The good faith interpretation of the Board of any provision of
the Plan, the Option or this Agreement, and any determination with respect
thereto or hereto by the Board, shall be final, conclusive and binding on all
parties.
12. RESTRICTIVE LEGENDS. Optionee hereby acknowledges that federal
securities laws and the securities laws of the state in which Optionee resides
may require the placement of certain restrictive legends upon the Shares issued
upon exercise of the Option, and Optionee hereby consents to the placing of any
such legends upon certificates evidencing the Shares as the Company, or its
counsel, may reasonably deem necessary; provided, however, that any such legend
or legends shall be removed when no longer applicable.
13. NOTICES. All notices, requests and other communications hereunder
shall be in writing and, if given by telecopy, shall be deemed to have been
validly delivered 12 hours after confirmation of transmission to the fax numbers
set forth below, if sent during usual business hours; if given by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery; and, if mailed, shall be deemed to have been validly served,
given or delivered three business days after deposit in the United States mails,
as registered or certified mail, with proper postage prepaid and addressed to
the party or parties to be notified, at the following addresses (or such other
address(es) as a party may designate for itself by like notice):
4.
If to the Company:
Golden State Vintners, Inc.
000 Xxxxx'x Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
If to Optionee:
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Fax No.:
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14. NO RIGHT TO REELECTION. Nothing contained in this Agreement shall
confer, intend to confer or imply any obligation on the part of the Board to
nominate any of its members for reelection by the Company's stockholders, nor
confer upon any Optionee the right to remain a member of the Board for any
period of time, or at any particular rate of compensation.
15. GOVERNING LAW. This Agreement shall be construed under and governed
by the laws of the State of Delaware without regard to the conflict of law
provisions thereof.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and both of which together shall be deemed one
Agreement.
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5.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.
THE COMPANY:
GOLDEN STATE VINTNERS, INC.,
a Delaware corporation
By:
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Xxxxxxx X. X'Xxxxx
Chief Executive Officer
OPTIONEE:
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