As filed with the Securities and Exchange Commission on November 18, 1996.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PYRAMID BREWERIES INC.
(Exact name of registrant as specified in its charter)
Washington 91-1258355
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
91 South Royal Brougham Way
Seattle, Washington 98134
(Address of Principal Executive Offices)(Zip Code)
PYRAMID BREWERIES INC. 1995 EMPLOYEE STOCK OPTION PLAN
PYRAMID BREWERIES INC. NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
PYRAMID BREWERIES INC. 1996 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Don Burdick
Chief Financial Officer
91 South Royal Brougham Way
Seattle, Washington 98134
(206) 682-8322
(Name, address and telephone number,
including area code, of agent for service)
Copy to:
David R. Wilson
Foster Pepper & Shefelman
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
Approximate date of commencement of proposed reoffer or resale to the
public by affiliates of the registrant: As soon as is
practicable after filing of the Registration Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to be to be offering price aggregate registration
registered registered(1) per share(2) offering price(2) fee(2)
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 396,000 shares $16.33 $6,466,680 $2,230
Common Stock, $0.01 par value 344,000 shares $5.0625 $1,741,500 $600
Common Stock, $0.01 par value 500,000 shares $4.303 $2,151,500 $742
- -------------------------------------------------------------------------------
Total Fee: $3,572
===============================================================================
<PAGE>
(1) Pursuant to Rule 457(h) of the Securities Act, the amount of shares to
be registered is the maximum amount of
shares issuable herein.
(2) Pursuant to Rules 457(c) and (h) of the Securities Act, the proposed
maximum offering price per share of Common Stock subject to outstanding options
has been calculated on the basis of the average exercise price of outstanding
options, and the proposed maximum offering price per share of Common Stock
available for grant under the Plans that are not subject to outstanding options
has been calculated on the basis of the current price per share of Common Stock.
As of November 15, 1996, there were outstanding options to purchase 396,000
shares of Common Stock pursuant to the Pyramid Breweries Inc. 1995 Employee
Stock Option Plan and the Pyramid Breweries Inc. Non-Employee Director Stock
Option Plan (collectively, the "Option Plans"), with an aggregate average
exercise price of $16.33 per share. As of November 15, 1996, there were 344,000
shares of Common Stock available for grant under the Option Plans that are not
subject to outstanding options, with a proposed maximum offering price of
$5.0625 per share, which is the average of the high and low prices for one share
of Common Stock as reported by The Nasdaq Stock Market National Market System on
November 14, 1996 (the "Average Price"). As of November 15, 1996, there were
500,000 shares of Common Stock available for grant under the Pyramid Breweries
Inc. 1996 Employee Stock Purchase Plan, with a proposed maximum offering price
of $4.303 per share, which is 85 percent of the Average Price.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
REOFFER PROSPECTUS
CROSS REFERENCE SHEET
Showing Location in Prospectus of Information Required by
Part I of Form S-3.
<S> <C> <C>
1. Forepart of the Registration Statement and Facing Page of Registration Statement,
Outside Front Cover Page of Prospectus Reoffer Prospectus Cross Reference Sheet,
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Available Information, Incorporation of
Prospectus Certain Documents by Reference, Table of
Contents
3. Summary Information, Risk Factors and Ratio of Cover Page of Prospectus
Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Not Applicable
10. Interests of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain Documents by
Reference Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act Liabilities
<PAGE>
PROSPECTUS
PYRAMID BREWERIES INC.
91 South Royal Brougham Way
Seattle, Washington 98134
(206) 682-8322
1,240,000 Shares of Common Stock
($0.01 par value per share)
This Prospectus relates to an aggregate of 1,240,000 shares (the
"Shares") of common stock, $0.01 par value ("Common Stock"), of Pyramid
Breweries Inc. (the "Registrant"), and is to be used in connection with the
reoffer and resale of shares of Common Stock issuable to the selling
shareholders of the Registrant listed at the section entitled "Selling
Shareholders" herein (the "Selling Shareholders") upon exercise of options
issued, or which may be issued, under the Registrant's 1995 Employee Stock
Option Plan, the Registrant's Non-Employee Director Stock Option Plan and the
Registrant's 1996 Employee Stock Purchase Plan. The Shares may be sold in the
market (The Nasdaq Stock Market's National Market System) or in privately
negotiated transactions from time to time. The Registrant will not receive any
proceeds from the sale of Shares registered hereby.
The Registrant's Common Stock trades on The Nasdaq Stock Market under
the symbol "PMID". The last reported sales price of a share of Common Stock on
The Nasdaq Stock Market on November 14, 1996 was $5.00.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The offer and sale of the Shares will be made in accordance with the
plan of distribution described in this Prospectus. See "Plan of Distribution."
The Selling Shareholders reserve the sole right to accept and, together with its
agents from time to time, to reject, in whole or in part, any proposed purchase
of Shares to be made directly or through agents. The Registrant will pay all
expenses of the offering, other than selling commissions to or expenses of
brokers or dealers retained by the Selling Shareholders, which commissions and
expenses will be paid by the Selling Shareholders.
If an agent of any Selling Shareholder or a dealer is involved in the
sale of the Shares in respect of which this Prospectus is being delivered, the
net proceeds to the Selling Shareholders from such sale will be the purchase
price of such Shares less such commission in the case of an agent, the purchase
price of such Shares in the case of a dealer, and less, in each case, other
attributable issuance expenses. The aggregate proceeds to the Selling
Shareholders from all the Shares will be the purchase price of Shares sold less
the aggregate of agents' commissions and underwriters' discounts and other
expenses of issuance and distribution. See "Plan of Distribution" for possible
indemnification arrangements for the agents, dealers and underwriters.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by the Registrant or the Selling Shareholders. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the Common Stock offered by this Prospectus, nor does it
constitute an offer to any person in any jurisdiction in which such offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
the information contained herein is correct as of any time subsequent to the
date hereof.
The date of this Prospectus is November 18,
1996.
<PAGE>
TABLE OF CONTENTS
Page
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 3
Use of Proceeds.......................................................... 3
Selling Shareholders..................................................... 3
Plan of Distribution..................................................... 3
AVAILABLE INFORMATION
The Registrant is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Registrant with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at Seven World Trade Center (13th Floor), New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661, and copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission also maintains a Web site that contains copies
of reports, proxy and information statements and other information regarding
registrants that file electronically, including the Registrant, with the
Commission at http:\\www.sec.gov. In addition, the Common Stock trades on The
Nasdaq Stock Market, and material filed by the Registrant can be inspected at
the offices of the National Association of Securities Dealers, Inc., Report
Section, 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement filed by
the Registrant with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain information contained in
that Registration Statement, and reference is hereby made to that Registration
Statement and the exhibits filed therewith for further information with respect
to the Registrant and the Common Stock offered hereby. Any statements contained
herein concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Commission are
incorporated by reference in this Registration Statement.
(1) Annual Report on Form 10-K for the year ended December 31, 1995;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996;
(3) Amendment on Form 10-Q/A to the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996;
(4) Quarterly Report on Form 10-Q for the quarter ended June 30, 1996;
(5) Quarterly Report on Form 10-Q for the quarter ended September 30, 1996:
and
(6) The description of the Registrant's Common Stock, $0.01 par value,
contained in the Registrant's Registration Statement on Form 8-A, dated October
27, 1995, filed pursuant to Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
2
<PAGE>
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which registers all securities then remaining unsold, shall be deemed to
be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
The Registrant will provide without charge to any person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents).
Requests should be directed to Pyramid Breweries Inc., 91 South Royal Brougham
Way, Seattle, Washington 98134, Attn: Investor Relations Coordinator (telephone
(206) 682-8322).
USE OF PROCEEDS
The Registrant will not receive any proceeds from the sale of Common
Stock by the Selling Shareholders.
SELLING SHAREHOLDERS
The Selling Shareholders under this Prospectus are directors and
executive officers of the Registrant who may be deemed affiliates of the
Registrant. The names of the Selling Shareholders and the amount of Shares which
will be sold hereunder will be provided at a later date by a supplement to this
Prospectus.
PLAN OF DISTRIBUTION
The Selling Shareholders (or their pledgees, donees, transferees, or
other successors in interest) from time to time may sell all or a portion of the
Shares "at the market" to or through a marketmaker or into an existing trading
market, in private sales, including direct sales to purchasers, or otherwise at
prevailing market prices or at negotiated or fixed prices. By way of example,
and not by way of limitation, the Shares may be sold by one or more of the
following methods: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the Shares as agent but may purchase and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the seller may arrange for other brokers or
dealers to participate. Brokers or dealers will receive commissions or discounts
from the seller in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act, in connection
with such sales. In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Selling Shareholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Shares
against certain liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
broker-dealer which purchases Shares as principal or any profits received on the
resale of such Shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
In order to comply with certain state securities laws, if applicable,
the Common Stock will not be sold in a particular state unless the Common Stock
has been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
The Common Stock offered hereby will be sold by the Selling
Shareholders acting as principals for their own account. The Registrant will
receive none of the proceeds from such sales.
3
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In accordance with Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"), and the instructional Note to Part I of Form
S-8, the information required by Part I to be contained in the Section 10(a)
prospectus has been omitted from this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Pyramid Breweries Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference in this Registration Statement:
(1) Annual Report on Form 10-K for the year ended December 31, 1995;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996;
(3) Amendment on Form 10-Q/A to the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996;
(4) Quarterly Report on Form 10-Q for the quarter ended June 30, 1996;
(5) Quarterly Report on Form 10-Q for the quarter ended September 30, 1996;
and
(6) The description of the Registrant's Common Stock, $0.01 par value,
contained in the Registrant's Registration Statement on Form 8-A, dated October
27, 1995, filed pursuant to Section 12 of the Securities Exchange Act of 1934
(the "Exchange Act"), including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
No expert or counsel named in the Registration Statement has any
substantial interest in the securities of the Registrant.
Item 6. Indemnification of Directors and Officers.
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act. Article VII of the Registrant's
Amended and Restated Articles of Incorporation (Exhibit 3.1 hereto) and Section
9.2 of the Registrant's Amended and Restated Bylaws (Exhibit 3.2 hereto) provide
for indemnification of the Registrant's directors to the maximum extent
permitted by Washington law. Section 9.2 of the Registrant's Amended and
Restated Bylaws also permits the Registrant's board of directors to indemnify
the Registrant's officers,
II-1
<PAGE>
employees and agents up to the maximum extent permitted by Washington law. The
Registrant has entered into indemnification agreements with all of its directors
and with George Hancock, who is both an officer and a director. The directors
and officers of the Registrant also may be indemnified against liability they
may incur for serving in such capacity pursuant to a liability insurance policy
maintained by the Registrant for such purpose.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its Stockholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct or a knowing
violation of law, illegal corporate distributions, or any transaction from which
the director personally receives a benefit in money, property or services to
which the director is not legally entitled. Article VI of the Registrant's
Amended and Restated Articles of Incorporation contains provisions implementing,
to the fullest extent permitted by Washington law, such limitations on a
director's liability to the Registrant and its Stockholders.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Pyramid Breweries Inc. 1995 Employee Stock Option Plan (incorporated by
reference to Exhibit 10.9 of the Registrant's Registration Statement on Form S-1
(File No. 33-97834))
4.2 Pyramid Breweries Inc. Non-Employee Director Stock Option Plan
(incorporated by reference to Exhibit 10.10 of the Registrant's Registration
Statement on Form S-1 (File No. 33-97834))
4.3 Pyramid Breweries Inc. 1996 Employee Stock Purchase Plan
4.4 Amended and Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1 (File No. 33-97834))
5 Opinion of Foster Pepper & Shefelman
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Foster Pepper & Shefelman (included in its opinion filed as
Exhibit 5)
24 Power of Attorney (included on the signature page of this Registration
Statement)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
II-2
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington on November 18, 1996.
PYRAMID BREWERIES INC.
/s/ George Hancock
------------------------------------------
By: George Hancock
Chief Executive Officer and President
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
George Hancock and Don Burdick, or either of them, as attorneys-in-fact with
full power of substitution, to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on November 18, 1996.
/s/ George Hancock /s/ John Stoddard
- -------------------------- --------------------------
George Hancock John Stoddard
Chief Executive Officer, Chairman of the Board
President and Director
(Principal Executive Officer)
/s/ Don Burdick /s/ John T. Bryce
- --------------------------- -------------------------
Don Burdick John T. Bryce
Chief Financial Officer, Director
Vice President Finance, Legal and
Administration, Secretary and General Counsel
(Principal Accounting Officer and
Principal Financial Officer)
/s/ George C. Textor
- -------------------------------
George C. Textor
Director
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
4.1 Pyramid Breweries Inc. 1995 Employee Stock Option Plan (incorporated by
reference to Exhibit 10.9 of the Registrant's Registration Statement on Form S-1
(File No. 33-97834))
4.2 Pyramid Breweries Inc. Non-Employee Director Stock Option Plan
(incorporated by reference to Exhibit 10.9 of the Registrant's Registration
Statement on Form S-1 (File No. 33-97834))
4.3 Pyramid Breweries Inc. 1996 Employee Stock Purchase Plan
4.4 Amended and Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1 (File No. 33-97834))
5 Opinion of Foster Pepper & Shefelman
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Foster Pepper & Shefelman (included in its opinion filed as
Exhibit 5)
24 Power of Attorney (included on the signature page of this Registration
Statement)
<PAGE>
</TABLE>
PYRAMID BREWERIES INC. EXHIBIT 4.3
1996 EMPLOYEE STOCK PURCHASE PLAN
Pyramid Breweries Inc. (the "Company") does hereby establish its 1996
Employee Stock Purchase Plan (the "Plan") as follows:
1. Purpose of the Plan. The Plan is intended to provide a method
whereby eligible employees of the Company and its Subsidiaries will have an
opportunity to acquire a proprietary interest in the Company through the
purchase of shares of common stock of the Company. The Company believes that
employee participation in the ownership of the Company is of benefit to both the
employees and the Company. The Company intends to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Code. The provision of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner that is consistent with the requirements of that
Section of the Code.
2. Definitions.
Account. "Account" shall mean the funds that are accumulated
with respect to each individual Participant as a result of payroll deductions
for the purpose of purchasing Shares under the Plan. The funds that are
allocated to a Participant's account shall at all times remain the property of
that Participant, but such funds may be commingled with the general funds of the
Company.
Base Pay. "Base Pay" means an employee's regular straight time salary or
earnings.
Board. The "Board" means the Board of Directors of the Company.
Code. The "Code" means the Internal Revenue Code of 1986, as amended.
Commencement Date. The "Commencement Date" means the January 1, April 1,
July 1 or October 1, as the case may be, on which the particular Offering
begins.
Ending Date. The "Ending Date" means the March 31, June 30, September 30 or
October 31, as the case may be, on which the particular Offering concludes.
ESPP Broker. The "ESPP Broker" is a qualified stock brokerage
or other financial services firm that has been designated by the Company.
Holding Period. The "Holding Period" shall mean the holding
period that is set forth in Section 423(a) of the Code, which, as of the date
that the Company's Board of Directors adopted this Plan, is both (a) that two
(2) year period after the Commencement Date and (b) that one (1) period after
transfer to a Participant of any Shares under the Plan.
Participant. "Participant" means an employee who, pursuant to Section 3, is
eligible to participate in the Plan and has complied with the requirements of
Section 7.
Offerings. "Offerings" means the twenty separate consecutive three month
offerings for the purchase and sale of Shares under the Plan. Each one of the
Offerings shall be referred to as an "Offering."
Shares. "Shares" means shares of the Company's common stock, $.01 par
value, that will be sold to Participants under the Plan.
Subsidiaries. "Subsidiaries" shall mean any present or future domestic or
foreign corporation that: (i) would be a "subsidiary corporation" of the Company
as that term is defined in Section 424 of the Code, and
1
<PAGE>
(ii) whose employees have been designated by the Board to be eligible, subject
to Section 3, to be Participants under the Plan.
Withdrawal Notice. "Withdrawal Notice" means a notice, in a form designated
by the Company, that a Participant who wishes to withdraw from an Offering must
submit to the Company pursuant to Section 22 prior to the Ending Date.
3. Employees Eligible to Participate. Any regular employee of the
Company or any of its Subsidiaries who (a) is in the employ of the Company or
any of its Subsidiaries on the Commencement Date, (b) has been so employed for
at least ninety days and (c) has worked an average of twenty (20) hours per week
during such employment is eligible to participate in the Plan, except officers
of the Company within the meaning of Rule 16a-1 promulgated by the Securities
and Exchange Commission under Section 16 of the Securities Exchange Act of 1934,
as amended.
4. Offerings. The Plan shall consist of twenty separate consecutive
three month Offerings. The first Offering shall commence on July 1, 1996.
Thereafter, Offerings shall commence on each subsequent October 1, January 1,
April 1, July 1, and the final Offering under the Plan shall commence on April
1, 2001 and terminate on June 30, 2001.
5. Price. The purchase price per Share shall be the lesser of (1) 85
percent of the fair market value of the stock on the Commencement Date, or the
nearest subsequent business day; or (2) 85 percent of the fair market value of
the stock on the Ending Date, or the nearest prior business day. Fair market
value shall mean the closing bid price as reported on the National Association
of Securities Dealers Automated Quotation System or, if the stock is traded on a
stock exchange, the closing price for the stock on the principal of such
exchange.
6. Number of Shares Reserved Under the Plan. The maximum number of
Shares that will be offered under the Plan is 500,000. If, on any date, the
total number of Shares for which purchase rights are to be granted pursuant to
Section 9 exceeds the number of Shares then available under this Section 6,
(after deduction of all Shares (a) that have been purchased under the Plan, and
(b) for which rights to purchase are then outstanding), the Company shall make a
pro rata allocation of the Shares that remain available in as nearly a uniform
manner as shall be practicable and as it shall determine, in its sole judgement,
to be equitable. In such event, each Participant's payroll deductions shall be
reduced accordingly and the Company shall give to each Participant a written
notice of such reduction.
7. Participant. An eligible employee may become a Participant by
completing the enrollment agreement that shall be provided by the Company and
filing it with the Company prior to the Commencement Date of the Offering to
which it relates, Participation in one Offering under the Plan shall neither
limit, nor require, participation in any other Offering.
8. Payroll Deductions.
8.1 At the time the Enrollment Agreement is filed with the
Company and for so long as a Participant participates in the Plan, each
Participant shall authorize the Company to make payroll deductions of either (a)
a fixed dollar amount per pay period or (b) a whole percentage (not partial or
fractional) of Base Pay; provided, however, that no payroll deduction shall
exceed 10 percent of Base Pay. The amount of the minimum fixed dollar deduction
may be adjusted by the Board of Directors from time to time; provided, however,
that a Participant's existing rights under any Offering that has already
commenced may not be adversely affected thereby.
8.2 Each Participant's payroll deductions shall be credited to
that Participant's Account. A Participant may not make a separate cash payment
into such Account nor may payment for Shares be made from other than the
Participant's Account.
8.3 A Participant's payroll deductions shall begin on the
Commencement Date, and shall end on the Ending Date unless the Participant
elects to withdraw pursuant to Section 13.
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8.4 A Participant may discontinue participation in the Plan as
provided in Section 13, but no other change may be made during an Offering and,
specifically, a Participant may not alter the amount or rate of payroll
deductions during an Offering.
9. Granting of Right to Purchase. On the Commencement Date, the Plan
shall be deemed to have granted automatically to each Participant a right to
purchase as many full Shares (not any fractional Shares) as may be purchased
with such Participant's Account.
10. Purchase of Shares. On the Ending Date, each Participant who has
not otherwise withdrawn from an Offering shall be deemed to have carried out the
right to purchase, and shall be deemed to have purchased at the purchase price
set forth in Section 5, the number of full Shares (not any fractional Shares)
that may be purchased with such Participant's Account.
11. Participant's Rights as a Shareholder. No Participant shall have any
rights of a shareholder with respect to any Shares until the Shares have been
purchased in accordance with Section 10 and issued by the Company.
12. Evidence of Ownership of Shares.
12.1 Promptly following the Ending Date of each Offering, the
Shares that are purchased by each Participant shall be deposited into an account
that is established in the Participant's name with the ESPP Broker.
12.2 A Participant may direct, by written notice to the
Company prior to the Ending Date of the pertinent Offering, that the ESPP Broker
account be established in the names of the Participant and one such other person
as may be designated by the Participant as joint tenants with right of
survivorship, tenants in common, or community property, to the extent and in the
manner permitted by applicable law.
12.3 A Participant shall be free to undertake a disposition,
as that term is defined in Section 424(c) of the Code (which generally includes
any sale, exchange, gift or transfer of legal title), of Shares in the
Participant's ESPP Broker account at any time, whether by sale, exchange, gift
or other transfer of title. Subject to Section 12.4 below, in the absence of
such a disposition of the Shares, however, the Shares must remain in the
Participant's account at the ESPP Broker until the Holding Period has been
satisfied. With respect to Shares for which the Holding Period has been
satisfied, a Participant may move such Shares to an account at another brokerage
firm of the Participant's choosing or request that a certificate that represents
the Shares be issued and delivered to the Participant.
12.4 A Participant who is not subject to United States
taxation may, at any time and without regard to the Holding Period, move its
Shares to an account at another brokerage firm of the Participant's choosing or
request that a certificate that represents the Shares be issued and delivered to
the Participant.
13. Withdrawal.
13.1 A Participant may withdraw from an Offering, in whole but
not in part, at any time prior to the Ending Date by delivering a Withdrawal
Notice to the Company, in which event the Company shall refund the Participant's
entire Account as soon as practicable thereafter.
13.2 An employee who has previously withdrawn from the Plan
may re-enter by complying with the requirements of Section 7. Upon compliance
with such requirements, an employee's re-entry into the Plan will become
effective on the Commencement Date of the next Offering following withdrawal.
14. Carryover of Account. At the conclusion of each Offering, the
Company shall automatically re-enroll each Participant in the next Offering, and
the balance of each Participant's Account shall be used to purchase Shares in
the subsequent Offering, unless the Participant has advised the Company
otherwise in writing, in which case the Company shall refund to the Participant
the funds that remain in the Participant's Account as soon as practicable
thereafter.
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15. Interest. No interest shall be paid or allowed on a Participant's
Account.
16. Rights Not Transferable. No Participant shall be permitted to sell,
assign, transfer, pledge, or otherwise dispose of or encumber such Participant's
Account or any rights to purchase or to receive Shares under the Plan other than
by will or the laws of descent and distribution, and such rights and interests
shall not be liable for, or subject to, a Participant's debts, contracts, or
liabilities. If a Participant purports to make a transfer, or a third party
makes a claim in respect of a Participant's rights or interests, whether by
garnishment, levy, attachment or otherwise, such purported transfer or claim
shall be treated as a withdrawal election under Section 13.
17. Termination of Employment. As soon as practicable upon termination of a
Participant's employment with the Company for any reason whatsoever, including
but not limited to death or retirement, the Participant's Account shall be
returned to the Participant or the Participant's estate, as applicable.
18. Amendment or Discontinuance of the Plan. The Board shall have the right
to amend, modify or terminate the Plan at any time without notice, provided that
(i) subject to Sections 19 and 23.1(b), no Participant's existing rights under
any Offering that is in progress may be adversely affected thereby, and (ii)
subject to Section 19, in the event that the Board desires to retain the
favorable tax treatment under Section 421 and 423 of the Code, no such amendment
of the Plan shall increase the number of Shares that were reserved for issuance
hereunder unless the Company's shareholders approve such an increase.
19. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings or rights, or any other change in the capital structure
of the Company, the Board may make such adjustment, if any, as it may deem
appropriate in the number, kind, and the price of the Shares that are available
for purchase under the Plan, and in the number of Shares that an employee is
entitled to purchase.
20. Share Ownership. Notwithstanding anything herein to the contrary,
no Participant shall be permitted to subscribe for any Shares under the Plan if
such Participant, immediately after such subscription, owns shares that account
for (including all shares that may be purchased under outstanding subscriptions
under the Plan) five percent or more of the total combined voting power or value
of all classes of shares of the Company or its Subsidiaries. For the foregoing
purposes the rules of Section 424(d) of the Code shall apply in determining
share ownership. In addition, no Participant shall be allowed to subscribe for
any Shares under the Plan that permit such Participant's rights to purchase
Shares under all "employee stock purchase plans" of the Company and its
Subsidiaries to accrue at a rate that exceeds $25,000 of the fair market value
of such shares (determined at the time such right to subscribe is granted) for
each calendar year in which such right to subscribe is outstanding at any time.
21. Administration. The Plan shall be administered by the Board, which
may engage the ESPP Broker to assist in the administration of the Plan. The
Board shall be vested with full authority to make, administer, and interpret
such rules and regulations as it deems necessary to administer the Plan, and any
determination, decision, or action of the Board in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive, and binding upon all Participants and any and all persons
that claim rights or interests under or through a Participant. The Board may
delegate any or all of its authority hereunder to a committee of the Board, as
it may designate.
22. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, that is designated by the Company from time to time for the receipt
thereof, and, in the absence of such a designation, the Company's Human
Resources Department; Attn: Director, Compensation and Benefits shall be
authorized to receive such notices.
23. Termination of the Plan.
23.1 This Plan shall terminate at the earliest of the following:
(a) June 30, 2001;
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(b) The date of the filing of a Statement of Intent to Dissolve by the
Company or the effective date of a merger or consolidation wherein the Company
is not to be the surviving corporation, which merger or consolidation is not
between or among corporations related to the Company. Prior to the occurrence of
either of such events, on such date as the Company may determine, the Company
may permit a Participant to carryout the right to purchase, and to purchase at
the purchase price set forth in Section 5, the number of full Shares (not any
fractional Shares) that may be purchased with that Participant's Account. In
such an event, the Company shall refund to the Participant the funds that remain
in the Participant's Account after such purchase;
(c) The date the Board acts to terminate the Plan in accordance with
Section 18 above; and
(d) The date when all of the Shares that were reserved for issuance
hereunder have been purchased.
23.2 Upon termination of the Plan, the Company shall refund to each
Participant the balance of each Participant's Account.
24. Limitations on Sale of Stock Purchased Under the Plan. The Plan is
intended to provide Shares for investment and not for resale. The Company does
not, however, intend to restrict or influence the conduct of any employee's
affairs. An employee, therefore, may sell Shares that are purchased under the
Plan at any time, subject to compliance with any applicable federal or state
securities laws. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE
PRICE OF THE SHARES.
25. Governmental Regulation. The Company's obligation to sell and deliver
Shares under this Plan is subject to any governmental approval that is required
in connection with the authorization, issuance, or sale of such Shares.
26. No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any Shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company,
and it shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, an employee's employment at any time.
27. Governing Law. The law of the state of Washington shall govern all
matters that relate to this Plan except to the extent it is superseded by the
laws of the United State.
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EXHIBIT 5
FOSTER PEPPER & SHEFELMAN
November 18, 1996
Board of Directors
Pyramid Breweries Inc.
91 South Royal Brougham Way
Seattle, Washington 98134
Gentlemen:
We have acted as counsel for Pyramid Breweries Inc., a Washington
corporation (the "Company"), in connection with the preparation and filing of a
Registration Statement ("Registration Statement") on Form S-8 under the
Securities Act of 1933, as amended, for 1,240,000 shares (the "Shares") of the
Company's common stock, $0.01 par value per share, that are issuable pursuant to
the Company's 1995 Employee Stock Option Plan, Non-employee Director Stock
Option Plan and 1996 Employee Stock Purchase Plan (collectively, the "Plans").
We have examined the Registration Statement, the Plans and such other documents
and records as we deem necessary for the purpose of this opinion.
Based on the foregoing, we are of the opinion that upon the issuance of
the Shares under the Plans as provided therein, the Shares will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this Opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FOSTER PEPPER & SHEFELMAN
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to incorporation
by reference in this registration statement of our reports dated January 31,
1996 included in Pyramid Breweries Inc.'s Form 10-K for the year ended December
31, 1995 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
Seattle, Washington
November 18, 1996
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