U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter ended June 11, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission file number 0-8251
ADOLPH COORS COMPANY
(Exact name of registrant as specified in its charter)
COLORADO 84-0178360
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Golden, Colorado 80401
(Address of principal executive offices) (Zip Code)
303-279-6565
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock (non-voting), no par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: All voting shares are held by Adolph Coors, Jr. Trust.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of July 19, 1995:
Class A Common Stock - 1,260,000 shares
Class B Common Stock - 37,160,679 shares
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ADOLPH COORS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Twelve weeks ended
----------------------
June 11, June 12,
1995 1994
---------- ---------
(In thousands, except per share data)
<S> <C> <C>
SALES $ 491,377 $ 527,088
Less - beer excise taxes ( 91,866) ( 94,872)
--------- ---------
NET SALES 399,511 432,216
--------- ---------
Costs and expenses:
Cost of goods sold 248,473 254,637
Marketing, general and administrative 120,450 127,693
Research and project development 3,368 3,313
--------- ---------
Total operating expenses 372,291 385,643
--------- ---------
OPERATING INCOME 27,220 46,573
Other expense - net 1,105 2,567
--------- ---------
Income before income taxes 26,115 44,006
Income tax expense 10,935 20,100
--------- ---------
NET INCOME $ 15,180 $ 23,906
========= =========
NET INCOME PER SHARE OF COMMON STOCK $ 0.40 $ 0.63
========= =========
Weighted average number of outstanding
shares of common stock 38,352 38,276
========= =========
Cash dividends declared per share
of common stock $ 0.125 $ 0.125
========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADOLPH COORS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Twenty-four weeks ended
----------------------
June 11, June 12,
1995 1994
---------- ---------
(In thousands, except per share data)
<S> <C> <C>
SALES $ 894,005 $ 917,335
Less - beer excise taxes ( 167,906) ( 166,666)
--------- ---------
NET SALES 726,099 750,669
--------- ---------
Costs and expenses:
Cost of goods sold 470,606 465,889
Marketing, general and administrative 219,546 220,619
Research and project development 6,690 5,510
--------- ---------
Total operating expenses 696,842 692,018
--------- ---------
OPERATING INCOME 29,257 58,651
Other expense - net 2,985 2,411
--------- ---------
Income before income taxes 26,272 56,240
Income tax expense 11,000 25,400
--------- ---------
NET INCOME $ 15,272 $ 30,840
========= =========
NET INCOME PER SHARE OF COMMON STOCK $ 0.40 $ 0.81
========= =========
Weighted average number of outstanding
shares of common stock 38,340 38,246
========= =========
Cash dividends declared per share
of common stock $ 0.250 $ 0.250
========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADOLPH COORS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 11, December 25,
1995 1994
---------- -----------
(In thousands)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 12,263 $ 27,168
Accounts and notes receivable 128,125 106,327
Inventories:
Finished 66,650 67,500
In process 32,468 22,918
Raw materials 16,288 38,108
Packaging materials 18,098 13,078
---------- ----------
Total inventories 133,504 141,604
Other assets 70,600 80,067
---------- ----------
Total current assets 344,492 355,166
---------- ----------
PROPERTIES, at cost, less accumulated
depreciation, depletion and amortiza-
tion of $1,277,800 in 1995
and $1,220,836 in 1994 928,723 922,208
OTHER ASSETS 102,061 94,202
---------- ----------
TOTAL ASSETS $1,375,276 $1,371,576
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADOLPH COORS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 11, December 25,
1995 1994
---------- -----------
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt $ 44,000 $ 44,000
Short-term borrowings 51,600 --
Accounts payable 122,908 164,430
Accrued expenses and other liabilities 154,606 171,784
---------- ----------
Total current liabilities 373,114 380,214
---------- ----------
LONG-TERM DEBT 131,000 131,000
DEFERRED TAX LIABILITY 73,010 71,660
OTHER LONG-TERM LIABILITIES 115,427 114,501
---------- ----------
Total liabilities 692,551 697,375
---------- ----------
SHAREHOLDERS' EQUITY:
Capital stock:
Preferred stock, non-voting, $1 par
value, 25,000,000 shares authorized
and no shares issued -- --
Class A common stock, voting, $1
par value, authorized and issued
1,260,000 shares 1,260 1,260
Class B common stock, non-voting,
no par value, 100,000,000 authorized
and 46,200,000 shares issued 11,000 11,000
---------- ----------
12,260 12,260
Paid-in capital 57,462 56,758
Retained earnings 629,101 623,418
Other 3,256 1,238
---------- ----------
702,079 693,674
Less - treasury stock, at cost,
Class B shares, 9,070,027 in
1995 and 9,133,060 in 1994 19,354 19,473
---------- ----------
Total shareholders' equity 682,725 674,201
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,375,276 $1,371,576
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADOLPH COORS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the twenty-four weeks ended
--------------------------
June 11, June 12,
1995 1994
--------- ---------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 15,272 $ 30,840
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion and
amortization 56,964 54,647
Change in accumulated deferred
income taxes 1,350 14,887
(Gain) Loss on sale or abandonment
of properties 1,542 ( 462)
Change in current assets and current
liabilities ( 66,622) ( 50,183)
Change in non-current assets and
liabilities ( 6,758) 663
--------- ---------
Net cash provided by
operating activities 1,748 50,392
--------- ---------
Cash flows from investing activities:
Additions to properties ( 62,685) ( 72,257)
Proceeds from sale of properties 514 1,993
Additions to intangible assets -- ( 13,852)
Other ( 2,419) ( 513)
--------- ---------
Net cash (used in)
investing activities ( 64,590) ( 84,629)
--------- ---------
Cash flows from financing activities:
Exercise of stock options, net of related
notes receivable 823 1,328
Dividends paid ( 4,791) ( 4,779)
Short-term borrowings 51,600 --
Other ( 147) --
--------- ---------
Net cash (used in) provided by
financing activities 47,485 ( 3,451)
--------- ---------
Cash and cash equivalents:
Net (decrease) in cash
and cash equivalents ( 15,357) ( 37,688)
Effect of exchange rate changes 452 --
Balance at beginning of year 27,168 82,211
--------- ---------
Balance at end of quarter $ 12,263 $ 44,523
========= =========
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Sales and Volume:
- ----------------
Adolph Coors Company (ACC) reported net sales of $399.5 million and $726.1
million for the second quarter and first half of 1995, representing 7.6% and
3.3% decreases, respectively, from the comparable periods in the prior year.
ACC's single direct subsidiary, Coors Brewing Company (CBC), had malt
beverage barrel sales of 4,842,000 for the second quarter of 1995 compared to
5,166,000 barrels sold in the second quarter of 1994, a decrease of 6.3%.
Malt beverage sales for the first half of 1995 declined 2.7% to 8,826,000
barrels from 9,073,000 for the same period of 1994. This decrease in sales
volume for the first half of 1995 resulted primarily from a decrease in sales
of Zima Clearmalt offset in part by a slight increase in sales of premium-
and-above beer products.
Gross Profit:
- ------------
Gross profit as a percentage of net sales for the second quarter of 1995
declined to 37.8% from 41.1% for the same period a year earlier. Gross
profit as a percentage of net sales for the first half of 1995 declined to
35.2% from 37.9% for the first half of 1994. These declines, for the quarter
and the year, resulted primarily from increased aluminum and other packaging
costs and lower sales volume of Zima Clearmalt, which has a higher gross
profit percentage than other brands.
Operating Income:
- ----------------
Operating income for the second quarter of 1995 decreased 41.6% to $27.2
million compared to $46.6 million for the second quarter of 1994. Operating
income for the first half of 1995 decreased 50.1% to $29.3 million from $58.7
million in 1994. Lower operating income was the result of a decline in gross
profit of $26.5 million and $29.3 million for the second quarter and first
half of 1995, respectively, and slightly higher research and development
costs, offset in part by lower marketing, general and administrative expenses
of 5.7% and .5% for the second quarter and first half of 1995, respectively.
The decrease in marketing, general and administrative expense was primarily
due to a decrease in marketing expense for 1995, when compared to 1994's
costs which included Zima's national expansion. The decrease in marketing
expense was partially offset by a 4.7% increase in general and administrative
expense from 1994. General and administrative expense for the first half of
1994 benefited from planned but unfilled positions resulting from the 1993
reduction in the Company's white-collar work force. Subsequent to the second
quarter of 1994 the majority of these positions were filled.
Non-Operating Expenses:
- ----------------------
Other expense - net was $1.1 million for the second quarter of 1995 compared
to $2.6 million for the same period a year earlier. The decline was
primarily due to lower net-interest expense and a gain on the sale of
properties. This decline in net interest expense resulted from the payment
of $50.0 million of principal on ACC's medium-term notes in the third quarter
of 1994.
Other expense - net was $3.0 million for the first half of 1995 compared to
$2.4 million for the same period a year earlier. The net increase of $.6
million is primarily the result of the benefit of a one-time pre-tax gain of
approximately $2.1 million on the sale of a company-owned distributorship in
1994 offset by lower net interest expense resulting from the scheduled 1994
payment of principal on ACC's medium-term notes.
Effective Tax Rate:
- ------------------
The consolidated effective tax rate for the second quarter and first half of
1995 decreased to 41.9% compared to 45.7% and 45.2%, respectively, for the
same periods of 1994. The 1994 effective tax rate included a valuation
allowance for a deferred tax asset, whereas the 1995 effective tax rate does
not include such an allowance.
Net Income:
- ----------
Consolidated net income for the second quarter and first half of 1995 was
$15.2 million, or $0.40 per share and $15.3 million, or $0.40 per share.
This compares to $23.9 million, or $0.63 per share and $30.8 million, or
$0.81 per share for the same periods a year earlier.
Working Capital Changes:
- -----------------------
Total current liabilities exceeded total current assets by $28.6 million at
June 11, 1995. While there has not been a significant change in working
capital position since year end 1994, ACC has incurred short-term borrowings
of $51.6 million under a line of credit. The $51.6 million of short-term
borrowings and a $14.9 million decline in cash and equivalents relate to the
decrease in accounts payable from the end of 1994. Other working capital
component changes since year end 1994 include seasonal increases in accounts
receivable, in process inventories and packaging material inventories offset
by declines in other current assets and raw materials. The decline in other
current assets relates primarily to a decline in prepaid income and VAT
taxes. The decrease in raw materials relates to seasonal usage of barley.
Cash Flows from Operating Activities:
- ------------------------------------
Net cash provided by consolidated operating activities for the first half of
1995 was $1.8 million, down from $50.4 million for the same period a year
ago. This decrease resulted primarily from changes relative to 1994 in net
income, accumulated deferred income taxes, accounts receivable and accounts
payable balances.
Deferred income taxes increased by $14.9 million in 1994 compared to a $1.4
million increase in 1995. The 1994 increase in deferred taxes related to the
reversal of several temporary differences which were not deductible in 1993.
Accounts receivable and notes receivable increased by $41.1 million in 1994
compared to a $21.8 million increase in 1995. The 1994 increase in accounts
and notes receivable relates to a substantial build in inventories at CBC's
distributors from the end of 1993.
Accounts payable decreased by $10.7 million in 1994 compared to a decrease of
$41.5 million in 1995. Higher accounts payable at year end 1994 were due
primarily to amounts owed by CBC to the can and end joint venture between CBC
and American National Can.
Cash Flows from Investing Activities:
- ------------------------------------
Cash flows used in investing activities for the first half of 1995 decreased
$20.0 million from the comparable period last year. Higher property and
intangible asset additions in 1994 were the result of purchases of a brewery
in Spain and a distributorship in California.
Cash Flows from Financing Activities:
- ------------------------------------
Cash flows provided by financing activities reflects a substantial increase
in short-term borrowings under ACC's line of credit. The other principal
activity was dividends paid to shareholders.
On July 14, 1995, ACC completed a $100 million private placement of debt with
$80.0 million having a 7-year maturity and $20.0 million having a 10-year
maturity. Interest will be paid on a semi-annual basis at rates between
6.76% and 6.95%. The proceeds will be used to repay $44.0 million of
publicly-held medium-term notes and to fund seasonal working capital needs.
Outlook:
- -------
In late March 1995, CBC and Anchor Glass Container Corporation entered into
a long-term partnership to produce glass bottles at the Coors glass
manufacturing facility. The partnership, Rocky Mountain Bottle
Company, will modernize the plant and expand its capacity by one-third.
The necessary licenses and environmental permits were obtained in late June
1995. In addition to the Rocky Mountain Bottle Company partnership, the
companies entered into another agreement that will make Anchor Glass a long-
term, preferred supplier for CBC.
In July, 1995, CBC announced an agreement in principal with Trigen/Nations to
sell its power plant equipment and support facilities for approximately $22.0
million. The agreement in principle also provides for a significant
investment by Trigen/Nations to upgrade the facilities. In return, Coors
will enter into a long-term arrangement with Trigen/Nations to purchase the
electricity and steam needed to operate the brewery's Golden facilities,
including the can, end and glass manufacturing operations.
As previously disclosed, the Company expects a continuation of a significant
increase in cost of goods sold (COGS) in 1995 over 1994 primarily due to
increased costs of aluminum and other packaging materials.
The Company expects that volume gains, modest price increases, productivity
gains arising from restructuring efforts and benefits derived from the
Company's joint venture with American National Can Company will offset in
part increases in COGS. These offsets are expected to benefit the third and
fourth quarters.
These statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-K for the year ended
December 25, 1994. The accompanying financial statements have not been
examined by the Company's independent accountants in accordance with
generally accepted auditing standards, but in the opinion of management of
Adolph Coors Company, such financial statements include all adjustments
necessary to present fairly the Company's financial position and results of
operations. The results of operations for the 24 weeks ended June 11, 1995,
may not be indicative of results that may be expected for the year ending
December 31, 1995.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In January 1992, ACC and CBC (as well as two former affiliates that are now
subsidiaries of ACX Technologies, Inc.) were sued by TransRim Enterprises
(USA) Ltd. in Federal District Court for the District of Colorado. TransRim
alleged that the defendants misused confidential information and breached an
implied contract to proceed with a joint venture project to build and operate
a paper board mill. TransRim initially claimed damages totaling $159 million
based on a number of theories, some of which were dismissed from the case by
the judge granting the defendants' motion for partial summary judgment. A
jury trial was held in April 1994, and the jury returned a verdict in favor
of all defendants on all claims. The U.S. Court of Appeals, 10th Judicial
Circuit, upheld the verdict in a decision rendered April 7, 1995. TransRim's
petition to have the 10th Circuit rehear the appeal has been denied.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The Exhibit filed as part to this report is listed below.
Exhibit No. Description
----------- -----------
10.6 Adolph Coors Company Equity Incentive Plan.
Amended and restated, effective May 31, 1995.
10.12 Adolph Coors Company Equity Compensation Plan for
Non-Employee Directors. Amended and restated,
effective February 16, 1995.
(b) Reports on Form 8-K
None.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADOLPH COORS COMPANY
By /s/ Timothy V. Wolf
--------------------------------
Timothy V. Wolf
Vice President, Treasurer,
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
July 26, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000024545
<NAME> ADOLPH COORS COMPANY
<MULTIPLIER> 1000
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAR-20-1995
<PERIOD-END> JUN-11-1995
<EXCHANGE-RATE> 1
<CASH> 12263
<SECURITIES> 0
<RECEIVABLES> 128125
<ALLOWANCES> 0
<INVENTORY> 133504
<CURRENT-ASSETS> 344492
<PP&E> 928723
<DEPRECIATION> 0
<TOTAL-ASSETS> 1375276
<CURRENT-LIABILITIES> 373114
<BONDS> 131000
<COMMON> 12260
0
0
<OTHER-SE> 670465
<TOTAL-LIABILITY-AND-EQUITY> 1375276
<SALES> 894005
<TOTAL-REVENUES> 726099
<CGS> 470606
<TOTAL-COSTS> 696842
<OTHER-EXPENSES> 2985
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 26272
<INCOME-TAX> 11000
<INCOME-CONTINUING> 15272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15272
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
ADOLPH COORS COMPANY
EQUITY INCENTIVE PLAN
Amended and restated,
effective May 31, 1995
<PAGE>
TABLE OF CONTENTS
Section 1 Introduction 1
1.1 Establishment and Amendment 1
1.2 Purposes 1
1.3 Effective Date 1
Section 2 Definitions 1
2.1 Definitions 1
2.2 Gender and Number 2
Section 3 Plan Administration 2
Section 4 Stock Subject to the Plan 3
4.1 Number of Shares 3
4.2 Other Shares of Stock 3
4.3 Adjustments for Stock Split, Stock Dividend, Etc 3
4.4 Other Distributions and Changes in the Stock 3
4.5 General Adjustment Rules 4
4.6 Determination by the Committee, Etc 4
Section 5 Reorganization or Liquidation 4
Section 6 Participation 5
6.1 In General 5
6.2 Restriction on Award Grants to Certain Individuals 5
Section 7 Stock Options 5
7.1 Grant of Stock Options 5
7.2 Stock Option Certificates 5
7.3 Shareholder Privileges 7
Section 8 Restricted Stock Awards 8
8.1 Grant of Restricted Stock Awards 8
8.2 Restrictions 8
8.3 Privileges of a Stockholder, Transferability 8
8.4 Enforcement of Restrictions 8
Section 9 Purchase of Stock 8
9.1 General 8
9.2 Other Terms 9
Section 10 Other Common Stock Grants 9
Section 11 Company Right To Purchase Stock 9
11.1 Right of First Refusal 9
11.2 Marking of Certificates 9
Section 12 Change in Control 10
12.1 In General 10
12.2 Limitation on Payments 10
Section 13 Rights of Employees; Participants 10
13.1 Employment 10
13.2 Nontransferability 11
Section 14 General Restrictions 11
14.1 Investment Representations 11
14.2 Compliance with Securities Laws 11
14.3Changes in Accounting Rules 11
Section 15 Other Employee Benefits 11
Section 16 Plan Amendment, Modification and Termination 12
Section 17 Withholding 12
17.1 Withholding Requirement 12
17.2Withholding With Stock 12
Section 18 Requirements of Law 12
18.1 Requirements of Law 12
18.2 Federal Securities Law Requirements 12
18.3 Governing Law 12
Section 19 Duration of the Plan 13
<PAGE>
ADOLPH COORS COMPANY
EQUITY INCENTIVE PLAN
Amended and restated,
effective May 31, 1995
Section 1
Introduction
1.1 Establishment and Amendment. Adolph Coors Company, a Colorado corporation
(hereinafter referred to, together with its Affiliated Corporations (as defined
in subsection 2.1(a)) as the "Company" except where the context otherwise
requires), established the Adolph Coors Company Equity Incentive Plan (the
"Plan") for certain key employees of the Company. The Plan, which permits the
grant of stock options and restricted stock awards to certain key employees of
the Company, was originally effective January 1, 1990. Pursuant to the power
granted in Section 16 (Section 14 prior to the Plan's amendment and
restatement), the Company hereby amends and restates the Plan in its entirety,
effective May 31, 1995.
1.2 Purposes. The purposes of the Plan are to provide the key management
employees selected for participation in the Plan with added incentives to
continue in the service of the Company and to create in such employees a more
direct interest in the future success of the operations of the Company by
relating incentive compensation to the achievement of long-term corporate
economic objectives, so that the income of the key management employees is more
closely aligned with the income of the Company's shareholders. The Plan is also
designed to attract key employees and to retain and motivate participating
employees by providing an opportunity for investment in the Company.
1.3 Effective Date. The original effective date of the Plan (the "Effective
Date") was January 1, 1990. The Plan, each amendment to the Plan, and each
option or other award granted hereunder is conditioned on and shall be of no
force or effect until approval of the Plan by the holders of the shares of
voting stock of the Company unless the Company, on the advice of counsel,
determines that shareholder approval is not necessary.
Section 2
Definitions
2.1 Definitions. The following terms shall have the meanings set forth below:
(a)"Affiliated Corporation" means any corporation or other entity (including but
not limited to a partnership) which is affiliated with Adolph Coors Company
through stock ownership or otherwise and is treated as a common employer under
the provisions of Sections 414(b) and (c) of the Internal Revenue Code.
(b)"Award" means an Option or a Restricted Stock Award issued hereunder, an
offer to purchase Stock made hereunder, or a grant of Stock made hereunder.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means a committee consisting of members of the Board who are
empowered hereunder to take actions in the administration of the Plan. The
Committee shall be so constituted at all times as to permit the Plan to comply
with Rule 16b-3 or any successor rule promulgated under the Securities Exchange
Act of 1934 (the "1934 Act"). Members of the Committee shall be appointed from
time to time by the Board, shall serve at the pleasure of the Board and may
resign at any time upon written notice to the Board.
(e) "Effective Date" means the original effective date of the Plan, January 1,
1990.
(f) "Eligible Employees" means those key management employees (including,
without limitation, officers and directors who are also employees) of the
Company or any division thereof, upon whose judgment, initiative and efforts
the Company is, or will become, largely dependent for the successful conduct
of their business.
(g) "Fair Market Value" means the average of the highest and lowest prices of
the Stock as reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on a particular date. If there are no
Stock transactions on such date, the Fair Market Value shall be determined as
of the immediately preceding date on which there were Stock transactions. If
the price of the Stock is not reported on NASDAQ, the Fair Market Value of the
Stock on the particular date shall be as determined by the Committee using a
reference comparable to the NASDAQ system. If, upon exercise of an Option, the
exercise price is paid by a broker's transaction as provided in section 7.2(g)
(ii)(D), Fair Market Value, for purposes of the exercise, shall be the price at
which the Stock is sold by the broker.
(h)"Internal Revenue Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(i) "Option" means a right to purchase Stock at a stated price for a specified
period of time. All Options granted under the Plan shall be "non-qualified
stock options" whose grant is not intended to fall under the provisions of
Section 422A of the Internal Revenue Code.
(j) "Option Price" means the price at which shares of Stock subject to an
Option may be purchased, determined in accordance with subsection 7.2(b).
(k) "Participant" means an Eligible Employee designated by the Committee from
time to time during the term of the Plan to receive one or more of the Awards
provided under the Plan.
(l) "Restricted Stock Award" means an award of Stock granted to a Participant
pursuant to Section 8 that is subject to certain restrictions imposed in
accordance with the provisions of such Section.
(m) "Stock" means the no par value Class B (non-voting) Common Stock of the
Company.
(n) "Voting Stock" means the $1.00 par value Class A Common Stock of the
Company.
2.2 Gender and Number. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.
Section 3
Plan Administration
The Plan shall be administered by the Committee. In accordance with the
provisions of the Plan, the Committee shall, in its sole discretion, select the
Participants from among the Eligible Employees, determine the Options,
Restricted Stock Awards and other Awards to be granted pursuant to the Plan,
the number of shares of Stock to be issued thereunder and the time at which
such Options and Restricted Stock Awards are to be granted, fix the Option
Price, period and manner in which an Option becomes exercisable, establish
the duration and nature of Restricted Stock Award restrictions establish
the terms and conditions on which an offer to purchase Stock will be made,
and establish such other terms and requirements of the various compensation
incentives under the Plan as the Committee may deem necessary or desirable
and consistent with the terms of the Plan. The Committee shall determine
the form or forms of the agreements with Participants which shall evidence
the particular provisions, terms, conditions, rights and duties of the
Company and the Participants with respect to Awards granted pursuant to the
Plan, which provisions need not be identical except as may be provided
herein. The Committee may from time to time adopt such rules and regulations
for carrying out the purposes of the Plan as it may deem proper and in the
best interests of the Company. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such expediency. No
member of the Committee shall be liable for any action or determination made in
good faith. The determinations, interpretations and other actions of the
Committee pursuant to the provisions of the Plan shall be binding and
conclusive for all purposes and on all persons.
Section 4
Stock Subject to the Plan
4.1 Number of Shares. Five Million (5,000,000) shares of Stock are authorized
for issuance under the Plan in accordance with the provisions of the Plan and
subject to such restrictions or other provisions as the Committee may from time
to time deem necessary. This authorization may be increased from time to time
by approval of the Board and by the shareholders of the Company if, in the
opinion of counsel for the Company, such shareholder approval is required.
Shares of Stock that may be issued upon exercise of Options, that are issued as
Restricted Stock Awards, that are purchased under the Plan, and that are used as
incentive compensation under the Plan shall be applied to reduce the maximum
number of shares of Stock remaining available for use under the Plan. The
Company shall at all times during the term of the Plan and while any Options are
outstanding retain as authorized and unissued Stock at least the number of
shares from time to time required under the provisions of the Plan, or otherwise
assure itself of its ability to perform its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to an Option
that expires or for any reason is terminated unexercised, any shares of Stock
that are subject to an Award (other than an Option) and that are forfeited, any
shares of Stock withheld for the payment of taxes or received by the Company as
payment of the exercise price of an Option and any shares of Stock that for any
other reason are not issued to an Eligible Employee or are forfeited shall
automatically become available for use under the Plan. However, any shares of
Stock that are subject to an Award (other than an Option) and that are forfeited
and any shares of Stock that are withheld for the payment of taxes or received
by the Company as payment of the exercise price of an Option shall be available
for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall at
any time increase or decrease the number of its outstanding shares of Stock or
change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or changed
in like manner as if they had been issued and outstanding, fully paid and
nonassessable at the time of such occurrence: (i) the shares of Stock as to
which Awards may be granted under the Plan; and (ii) the shares of the Stock
then included in each outstanding Award granted hereunder.
4.4 Other Distributions and Changes in the Stock. If
(a) the Company shall at any time distribute with respect to the Stock assets or
securities of persons other than the Company (excluding cash or distributions
referred to in Section 4.3),
(b) the Company shall at any time grant to the holders of its Stock rights to
subscribe pro rata for additional shares thereof or for any other securities of
the Company, or
(c) there shall be any other change (except as described in Section 4.3), in the
number or kind of outstanding shares of Stock or of any stock or other
securities into which the Stock shall be changed or for which it shall have been
exchanged, and if the Committee shall in its discretion determine that the
event described in subsection (a), (b), or (c) above equitably requires an
adjustment in the number or kind of shares subject to an Option or other
Award, an adjustment in the Option Price or the taking of any other action by
the Committee, including without limitation, the setting aside of any
property for delivery to the Participant upon the exercise of an Option or
the full vesting of an Award, then such adjustments shall be made, or other
action shall be taken, by the Committee and shall be effective for all
purposes of the Plan and on each outstanding Option or Award that involves
the particular type of stock for which a change was effected.
Notwithstanding the foregoing provisions of this Section 4.4, pursuant
to Section 8.3 below, a Participant holding Stock received as a Restricted Stock
Award shall have the right to receive all amounts, including cash and property
of any kind, distributed with respect to the Stock upon the Participant's
becoming a holder of record of the Stock.
4.5 General Adjustment Rules. No adjustment or substitution provided for in
this Section 4 shall require the Company to sell a fractional share of Stock
under any Option, or otherwise issue a fractional share of Stock, and the total
substitution or adjustment with respect to each Option and other Award shall be
limited by deleting any fractional share. In the case of any such substitution
or adjustment, the total Option Price for the shares of Stock then subject to
the Option shall remain unchanged but the Option Price per share under each such
Option shall be equitably adjusted by the Committee to reflect the greater or
lesser number of shares of Stock or other securities into which the Stock
subject to the Option may have been changed, and appropriate adjustments
shall be made to Restricted Stock Awards to reflect any such substitution or
adjustment.
4.6 Determination by the Committee, Etc. Adjustments under this Section 4 shall
be made by the Committee, whose determinations with regard thereto shall be
final and binding upon all parties thereto.
Section 5
Reorganization or Liquidation
If the Company is merged or consolidated with another corporation and the
Company is not the surviving corporation, or if all or substantially all of
the assets or more than 50% of the outstanding voting stock of the Company
is acquired by any other corporation, business entity or person, or in case
of a reorganization (other than a reorganization under the United States
Bankruptcy Code), including a divisive reorganization under Section 355 of
the Code, or liquidation of the Company, and if the provisions of Section 12
do not apply, the Committee, or the board of directors of any corporation
assuming the obligations of the Company, shall, as to the Plan and
outstanding Options and other Awards, either (i) make appropriate provision
for the adoption and continuation of the Plan by the acquiring or successor
corporation and for the protection of any such outstanding Options and
other Awards by the substitution on an equitable basis of appropriate stock
of the Company or of the merged, consolidated or otherwise reorganized
corporation that will be issuable with respect to the Stock, provided that no
additional benefits shall be conferred upon the Participants holding such
Options and other Awards as a result of such substitution, and the excess of
the aggregate Fair Market Value of the shares subject to the Options
immediately after such substitution over the Option Price thereof is not
more than the excess of the aggregate Fair Market Value of the shares subject
to such Options immediately before such substitution over the Option Price
thereof, or (ii) upon written notice to the Participants, provide that all
unexercised Options must be exercised within a specified number of days of
the date of such notice or they will be terminated. In the latter event,
the Committee shall accelerate the exercise dates of outstanding Options
and accelerate the restriction period and modify the performance
requirements for any outstanding Awards so that all Options and other Awards
become fully vested prior to any such event.
Section 6
Participation
6.1 In General. Participants in the Plan shall be those Eligible Employees who,
in the judgment of the Committee, are performing, or during the term of their
incentive arrangement will perform, vital services in the management, operation
and development of the Company or an Affiliated Corporation, and significantly
contribute, or are expected to significantly contribute, to the achievement of
long-term corporate economic objectives. Participants may be granted from time
to time one or more Awards; provided, however, that the grant of each such Award
shall be separately approved by the Committee, and receipt of one such Award
shall not result in automatic receipt of any other Award. Upon determination by
the Committee that an Award is to be granted to a Participant, written notice
shall be given to such person, specifying the terms, conditions, rights and
duties related thereto. Each Participant shall, if required by the Committee,
enter into an agreement with the Company, in such form as the Committee shall
determine and that is consistent with the provisions of the Plan, specifying
such terms, conditions, rights and duties. Awards shall be deemed to be
granted as of the date specified in the grant resolution of the Committee,
which date shall be the date of any related agreement with the Participant.
In the event of any inconsistency between the provisions of the Plan and any
such agreement entered into hereunder, the provisions of the Plan shall govern.
6.2 Restriction on Award Grants to Certain Individuals. Notwithstanding the
foregoing provisions of Section 6.1, no Awards shall be granted to any lineal
descendant of Adolph Coors, Jr. without the prior written approval of counsel to
the Company as to the effect of any such grant on the possible status of the
Company as a "personal holding company" within the meaning of Section 542 of the
Internal Revenue Code.
Section 7
Stock Options
7.1 Grant of Stock Options. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options. In
no event shall the exercise of one Option affect the right to exercise any other
Option or affect the number of shares of Stock for which any other Option may be
exercised, except as provided in subsection 7.2(j).
7.2 Stock Option Certificates. Each Option granted under the Plan shall be
evidenced by a written stock option certificate. A stock option certificate
shall be issued by the Company in the name of the Participant to whom the Option
is granted (the "Option Holder") and shall incorporate and conform to the
conditions set forth in this Section 7.2, as well as such other terms and
conditions, not inconsistent herewith, as the Committee may consider appropriate
in each case.
(a) Number of Shares. Each stock option agreement shall state that it covers a
specified number of shares of the Stock, as determined by the Committee.
(b) Price. The price at which each share of Stock covered by an Option may be
purchased shall be determined in each case by the Committee and set forth in the
stock option certificate.
(c) Duration of Options; Restrictions on Exercise. Each stock option agreement
shall state the period of time, determined by the Committee, within which the
Option may be exercised by the Option Holder (the "Option Period"), and shall
also set forth any installment or other restrictions on Option exercise during
such period, if any, as may be determined by the Committee.
(d) Termination of Employment, Death, Disability, Etc. Each stock option
agreement shall provide as follows with respect to the exercise of the Option
upon termination of the employment or the death of the Option Holder:
(i) If the employment of the Option Holder is terminated within the Option
Period for cause, as determined by the Company, the Option shall thereafter be
void for all purposes. As used in this subsection 7.2(d), "cause" shall mean a
gross violation, as determined by the Company, of the Company's established
policies and procedures, provided that the effect of this subsection 7.2(d)
shall be limited to determining the consequences of a termination and that
nothing in this subsection 7.2(d) shall restrict or otherwise interfere with
the Company's discretion with respect to the termination of any employee.
(ii) If the Option Holder retires from employment by the Company or its
affiliates during the Option Period pursuant to the Company's retirement policy,
or if the Option Holder becomes disabled (as determined pursuant to the
Company's Long-Term Disability Plan), the Option may be exercised by the
Option Holder, or in the case of death by the persons specified in
subsection (iii) of this subsection 7.2(d), within thirty-six months
following his or her retirement or disability (provided that such exercise
must occur within the Option Period), but not thereafter. In any such case,
the Option may be exercised only as to the shares as to which the Option had
become exercisable on or before the date of the Option Holder's termination of
employment.
(iii) If the Option Holder dies during the Option Period while still employed
or within the three-month period referred to in (iv) below, or within the
thirty-six-month period referred to in (ii) above, the Option may be exercised
by those entitled to do so under the Option Holder's will or by the laws of
descent and distribution within fifteen months following the Option Holder's
death, (provided that such exercise must occur within the Option Period), but
not thereafter. In any such case, the Option may be exercised only as to the
shares as to which the Option had become exercisable on or before the date
of the Option Holder's death.
(iv) If the employment of the Option Holder by the Company is terminated (which
for this purpose means that the Option Holder is no longer employed by the
Company or by an Affiliated Corporation) within the Option Period for any reason
other than cause, retirement pursuant to the Company's retirement policy,
disability or the Option Holder's death, the Option may be exercised by the
Option Holder within three months following the date of such termination
(provided that such exercise must occur within the Option Period), but not
thereafter. In any such case, the Option may be exercised only as to the shares
as to which the Option had become exercisable on or before the date of
termination of employment.
(e) Transferability. Each stock option agreement shall provide that the Option
granted therein is not transferable by the Option Holder except by will or
pursuant to the laws of descent and distribution, and that such Option is
exercisable during the Option Holder's lifetime only by him or her, or in the
event of disability or incapacity, by his or her guardian or legal
representative.
(f) Agreement to Continue in Employment. Each stock option agreement shall
contain the Option Holder's agreement to remain in the employment of the
Company, at the pleasure of the Company, for a continuous period of at least
one year after the date of such stock option agreement, at the salary rate in
effect on the date of such agreement or at such changed rate as may be fixed,
from time to time, by the Company.
(g) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method for exercising
the Option granted therein shall be by delivery to the Corporate Secretary of
the Company of written notice specifying the number of shares with respect to
which such Option is exercised and payment of the Option Price. Such notice
shall be in a form satisfactory to the Committee and shall specify the
particular Option (or portion thereof) which is being exercised and the
number of shares with respect to which the Option is being exercised. The
exercise of the Stock Option shall be deemed effective upon receipt of such
notice by the Corporate Secretary and payment to the Company. If requested by
the Company, such notice shall contain the Option Holder's representation that
he or she is purchasing the Stock for investment purposes only and his or her
agreement not to sell any Stock so purchased in any manner that is in
violation of the Securities Act of 1933, as amended, or any applicable state
law. Such restrictions, or notice thereof, shall be placed on the
certificates representing the Stock so purchased. The purchase of such Stock
shall take place at the principal offices of the Company upon delivery of
such notice, at which time the purchase price of the Stock shall be paid in
full by any of the methods or any combination of the methods set forth in
(ii) below. A properly executed certificate or certificates representing the
Stock shall be issued by the Company and delivered to the Option Holder. If
certificates representing Stock are used to pay all or part of the exercise
price, separate certificates for the same number of shares of Stock shall be
issued by the Company and delivered to the Option Holder representing each
certificate used to pay the Option Price, and an additional certificate shall be
issued by the Company and delivered to the Option Holder representing the
additional shares, in excess of the Option Price, to which the Option Holder is
entitled as a result of the exercise of the Option.
(ii) The exercise price shall be paid by any of the following methods or any
combination of the following methods:
(A) in cash;
(B)by certified or cashier's check payable to the order of the Company;
(C) by delivery to the Company of certificates representing the number of shares
then owned by the Option Holder, the Fair Market Value of which equals the
purchase price of the Stock purchased pursuant to the Option, properly endorsed
for transfer to the Company; provided however, that no Option may be exercised
by delivery to the Company of certificates representing Stock, unless such Stock
has been held by the Option Holder for more than six months; for purposes of
this Plan, the Fair Market Value of any shares of Stock delivered in payment of
the purchase price upon exercise of the Option shall be the Fair Market Value
as of the exercise date; the exercise date shall be the day of delivery of the
certificates for the Stock used as payment of the Option Price; or
(D) by delivery to the Company of a properly executed notice of exercise
together with irrevocable instructions to a broker to deliver to the Company
promptly the amount of the proceeds of the sale of all or a portion of the
Stock or of a loan from the broker to the Option Holder necessary to pay the
exercise price.
(h) Date of Grant. An option shall be considered as having been granted on the
date specified in the grant resolution of the Committee.
(i) Notice of Sale of Stock; Withholding. Each stock option agreement shall
provide that, upon exercise of the Option, the Option Holder shall make
appropriate arrangements with the Company to provide for the amount of
additional withholding required by Sections 3102 and 3402 of the Internal
Revenue Code and applicable state income tax laws, including payment of such
taxes through delivery of shares of Stock or by withholding Stock to be
issued under the Option, as provided in Section 17.
(j) Issuance of Additional Option. If an Option Holder pays all or any portion
of the exercise price of an Option with Stock, or pays all or any portion of the
applicable withholding taxes with respect to the exercise of an Option with
Stock which has been held by the Option Holder for more than six months, the
Committee shall grant to such Option Holder a new Option covering the number
of shares of Stock used to pay such exercise price and/or withholding tax.
The new Option shall have an Option Price per share equal to the Fair Market
Value of a share of Stock on the date of the exercise of the Option and shall
have the same terms and provisions as the Option, except as otherwise
determined by the Committee in its sole discretion. Effective for Options
granted on and after January 1, 1994, this section 7.2(j) shall be null and
void.
7.3 Shareholder Privileges. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the holder
of record of such Stock, except as provided in Section 4.
Section 8
Restricted Stock Awards
8.1 Grant of Restricted Stock Awards. Coincident with or following designation
for participation in the Plan, the Committee may grant a Participant one or more
Restricted Stock Awards consisting of shares of Stock. The number of shares
granted as a Restricted Stock Award shall be determined by the Committee.
8.2 Restrictions. A Participant's right to retain a Restricted Stock Award
granted to him under Section 8.1 shall be subject to such restrictions,
including but not limited to his continuous employment by the Company or an
Affiliated Corporation for a restriction period specified by the Committee
or the attainment of specified performance goals and objectives, as may be
established by the Committee with respect to such Award. The Committee may in
its sole discretion require different periods of employment or different
performance goals and objectives with respect to different Participants, to
different Restricted Stock Awards or to separate, designated portions of the
Stock shares constituting a Restricted Stock Award. In the event of the
death or disability (as defined in subsection 7.2(d)) of a Participant, or
the retirement of a Participant in accordance with the Company's established
retirement policy, all employment period and other restrictions applicable
to Restricted Stock Awards then held by him shall lapse with respect to a
pro rata part of each such Award based on the ratio between the number of
full months of employment completed at the time of termination of employment
from the grant of each Award to the total number of months of employment
required for such Award to be fully nonforfeitable, and such portion of each
such Award shall become fully nonforfeitable. The remaining portion of each
such Award shall be forfeited and shall be immediately returned to the
Company. In the event of a Participant's termination of employment for
any other reason, any Restricted Stock Awards as to which the employment period
or other restrictions have not been satisfied (or waived or accelerated as
provided herein) shall be forfeited, and all shares of Stock related thereto
shall be immediately returned to the Company.
8.3 Privileges of a Stockholder, Transferability. A Participant shall have all
voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him as a Restricted Stock Award under this
Section 8 upon his becoming the holder of record of such Stock; provided,
however, that the Participant's right to sell, encumber, or otherwise transfer
such Stock shall be subject to the limitations of Sections 9 and 11.2.
8.4 Enforcement of Restrictions. The Committee shall cause a legend to be
placed on the Stock certificates issued pursuant to each Restricted Stock Award
referring to the restrictions provided by Sections 8.2 and 8.3 and, in addition,
may in its sole discretion require one or more of the following methods of
enforcing the restrictions referred to in Sections 8.2 and 8.3:
(a) Requiring the Participant to keep the Stock certificates, duly endorsed, in
the custody of the Company while the restrictions remain in effect; or
(b) Requiring that the Stock certificates, duly endorsed, be held in the
custody of a third party while the restrictions remain in effect.
Section 9
Purchase of Stock
9.1 General. From time to time the Company may make an offer to certain
Participants, designated by the Committee in its sole discretion, to purchase
Stock from the Company. The number of shares of Stock offered by the Company to
each selected Participant shall be determined by the Committee in its sole
discretion. The purchase price for the Stock shall be as determined by the
Committee in its sole discretion and may be less than the Fair Market Value of
the Stock. The Participants who accept the Company's offer shall purchase the
Stock at the time designated by the Committee. The purchase shall be on such
additional terms and conditions as may be determined by the Committee in its
sole discretion.
9.2 Other Terms. The Committee may, in its sole discretion, grant Options,
Restricted Stock, or any combination thereof, on terms and conditions determined
by the Committee, in its sole discretion, to the Participants who purchase Stock
pursuant to Section 9.1.
Section 10
Other Common Stock Grants
From time to time during the duration of this Plan, the Board may, in its sole
discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock,
whether by purchase, outright grants, or otherwise. Any such arrangements shall
be subject to the general provisions of this Plan and all shares of Stock issued
pursuant to such arrangements shall be issued under this Plan.
Section 11
Company Right To Purchase Stock
11.1 Right of First Refusal. (a) In the event of the death of a Participant, or
if a Participant at any time proposes to transfer any of the Stock acquired
pursuant to the Plan to a third party, the Participant (or his personal
representative or estate, as the case may be) shall make a written offer (the
"Offer") to sell all of the Stock acquired pursuant to the Plan then owned by
the Participant (or thereafter acquired by the Participant's estate or personal
representative pursuant to any Award hereunder) to the Company at the "purchase
price" as hereinafter defined. In the case of a proposed sale of any of the
Stock to a third party, the Offer shall state the name of the proposed
transferee and the terms and conditions of the proposed transfer. In a case of
a proposed sale through or to a registered broker/dealer, the Offer shall state
the name and address of the broker. The Company shall have the right to
elect to purchase all (but not less than all) of the shares of Stock. The
Company shall have the right to elect to purchase the shares of Stock for a
period of ten (10) days after the receipt by the Company of the Offer. The
provisions of this Section 11 shall apply to proposed sales through or to a
registered broker/dealer at the prevailing market price, even if the
prevailing market price should fluctuate between the date the Company
receives the Offer and the date the Company elects to purchase the shares of
Stock. In all cases, the purchase price for the Stock shall be determined
pursuant to subsection 11.1(d).
(b) The Company shall exercise its right to purchase the Stock by given written
notice of its exercise to the Participant (or his personal representative or
estate, as the case may be). If the Company elects to purchase the Stock,
payment for the shares of Stock shall be made in full by Company check. Any
such payments shall be made within ten (10) days after the election to purchase
has been exercised.
(c) If the Stock is not purchased pursuant to the foregoing provisions, the
shares of Stock may be transferred by the Participant to the proposed transferee
named in the Offer to the Company, in the case of a proposed sale to a third
party. However, if such transfer is not made within 120 days following the
termination of the Company's right to purchase, a new offer must be made to the
Company before the Participant can transfer any portion of his shares and the
provisions of this Section 11 shall again apply to such transfer. If the
Company's right of first refusal under this Section 11 is created by an event
other than a proposed transfer to a third party, the shares of Stock shall
remain subject to the provisions of this Section 11 in the hands of the
registered owner of the Stock.
(d) The purchase price for each share of Stock purchased by the Company
pursuant to this Section 11 shall be equal to the Fair Market Value of the
Stock on the date the Company receives the Offer under subsection 11.1(a).
11.2 Marking of Certificates. Each certificate representing shares of Stock
acquired pursuant to this Plan shall bear the following legend:
The shares of stock represented by this Certificate are subject to all the terms
of the Adolph Coors Company Equity Incentive Plan, as the Plan may be amended
from time to time (the "Plan") and to the terms of a [Non-Qualified Stock Option
Agreement] [Restricted Stock Agreement] [Stock Purchase Agreement] between the
Company and the Participant (the "Agreement"). Copies of the Plan and the
Agreement are on file at the office of the Company. The Plan and the Agreement,
among other things, limit the right of the Owner to transfer the shares
represented hereby and provides that in certain circumstances the shares may be
purchased by the Company.
Section 12
Change in Control
12.1 In General. In the event of a change in control of the Company as defined
in Section 12.3, then (a) all Options shall become immediately exercisable in
full during the remaining term thereof, and shall remain so, whether or not the
Participants to whom such Options have been granted remain employees of the
Company or an Affiliated Corporation; and (b) all restrictions with respect to
outstanding Restricted Stock Awards shall immediately lapse.
12.2 Limitation on Payments. If the provisions of this Section 12 would result
in the receipt by any Participant of a payment within the meaning of Section
280G of the Internal Revenue Code and the regulations promulgated thereunder
and if the receipt of such payment by any Participant would, in the opinion of
independent tax counsel of recognized standing selected by the Company, result
in the payment by such Participant of any excise tax provided for in
Sections 280G and 4999 of the Internal Revenue Code, then the amount of such
payment shall be reduced to the extent required, in the opinion of independent
tax counsel, to prevent the imposition of such excise tax; provided, however,
that the Committee, in its sole discretion, may authorize the payment of all or
any portion of the amount of such reduction to the Participant.
12.3 Definition. For purposes of the Plan, a "change in control" shall mean any
of the following:
(i) The acquisition of or the ownership of fifty percent or more of the total
Voting Stock of the Company then issued and outstanding, by any person, or group
of affiliated persons, or entities not affiliated with the Company as of the
Effective Date of this Plan, without the consent of the Board of Directors, or
(ii) The election of individuals constituting a majority of the Board of
Directors who were not either (A) members of the Board of Directors prior to the
election or (B) recommended to the shareholders by management of the Company, or
(iii) A legally binding and final vote of the shareholders of the Company in
favor of selling all or substantially all of the assets of the Company.
Section 13
Rights of Employees; Participants
13.1 Employment. Nothing contained in the Plan or in any Option or Restricted
Stock Award granted under the Plan shall confer upon any Participant any right
with respect to the continuation of his or her employment by the Company or any
Affiliated Corporation, or interfere in any way with the right of the Company or
any Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of an Option or Restricted Stock Award.
Whether an authorized leave of absence, or absence in military or government
service, shall constitute a termination of employment shall be determined by the
Committee at the time.
13.2 Nontransferability. No right or interest of any Participant in an Option
or a Restricted Stock Award (prior to the completion of the restriction period
applicable thereto), granted pursuant to the Plan, shall be assignable or
transferable during the lifetime of the Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly, by operation of
law, or otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of a Participant's death, a Participant's rights and
interests in Options and Restricted Stock Awards shall, to the extent provided
in Sections 7, 8 and 9, be transferable by testamentary will or the laws of
descent and distribution, and payment of any amounts due under the Plan shall be
made to, and exercise of any Options may be made by, the Participant's legal
representatives, heirs or legatees. If in the opinion of the Committee a person
entitled to payments or to exercise rights with respect to the Plan is disabled
from caring for his affairs because of mental condition, physical condition or
age, payment due such person may be made to, and such rights shall be exercised
by, such person's guardian, conservator or other legal personal representative
upon furnishing the Committee with evidence satisfactory to the Committee of
such status.
Section 14
General Restrictions
14.1 Investment Representations. The Company may require any person to whom an
Option, Restricted Stock Award, Stock is granted, or to whom Stock is sold, as
a condition of exercising such Option or receiving such Restricted Stock Award
or Stock, or purchasing such Stock, to give written assurances in substance and
form satisfactory to the Company and its counsel to the effect that such person
is acquiring the Stock subject to the Option, Restricted Stock Award, Stock
grant, or purchase of Stock, for his own account for investment and not with any
present intention of selling or otherwise distributing the same, and to such
other effects as the Company deems necessary or appropriate in order to comply
with Federal and applicable state securities laws.
14.2 Compliance with Securities Laws. Each Option and Restricted Stock Award,
and Stock grant or purchase shall be subject to the requirement that, if at any
time counsel to the Company shall determine that the listing, registration or
qualification of the shares subject to such Option, Restricted Stock Award,
Stock grant or purchase upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental or regulatory
body, is necessary as a condition of, or in connection with, the issuance or
purchase of shares thereunder, such Option, Restricted Stock Award, or Stock
grant or purchase may not be accepted or exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have
been effected or obtained on conditions acceptable to the Committee.
Nothing herein shall be deemed to require the Company to apply for or to
obtain such listing, registration or qualification.
14.3 Changes in Accounting Rules. Notwithstanding any other provision of the
Plan to the contrary, if, during the term of the Plan, any changes in the
financial or tax accounting rules applicable to Options or Restricted Stock
Awards shall occur that, in the sole judgment of the Committee, may have a
material adverse effect on the reported earnings, assets or liabilities of the
Company, the Committee shall have the right and power to modify as necessary,
any then outstanding and unexercised Options and outstanding Restricted Stock
Awards as to which the applicable employment or other restrictions have not been
satisfied.
Section 15
Other Employee Benefits
The amount of any compensation deemed to be received by a Participant as a
result of the exercise of an Option, the sale of shares received upon such
exercise, the vesting of any Restricted Stock Award, or the purchase or
grant of Stock, shall not constitute "earnings" with respect to which any
other employee benefits of such employee are determined, including without
limitation benefits under any pension, profit sharing, life insurance or salary
continuation plan.
Section 16
Plan Amendment, Modification and Termination
The Board may at any time terminate, and from time to time may amend or modify
the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the shareholders
if shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that shareholder approval is otherwise necessary or
desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Restricted Stock Awards or Stock theretofore
granted or purchased under the Plan, without the consent of the Participant
holding such Options Restricted Stock Awards, or Stock.
Section 17
Withholding
17.1 Withholding Requirement. The Company's obligations to deliver shares of
Stock upon the exercise of any Option, the vesting of any Restricted Stock
Award, or the grant or purchase of Stock shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and other tax
withholding requirements.
17.2 Withholding With Stock. The withholding obligation with respect to the
grant of Restricted Stock shall be satisfied by the Company's withholding from
the shares otherwise issuable to the Participant shares of Stock having a value
equal to the amount required to be withheld. The value of shares of Stock to be
withheld shall be based on the Fair Market Value of the Stock on the date that
the amount of tax to be withheld is to be determined.
Section 18
Requirements of Law
18.1 Requirements of Law. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
18.2 Federal Securities Law Requirements. If a Participant is an officer or
director of the Company within the meaning of Section 16, Awards granted
hereunder shall be subject to all conditions required under Rule 16b-3, or any
successor rule promulgated under the 1934 Act, to qualify the Award for any
exception from the provisions of Section 16(b) of the 1934 Act available under
that Rule. Such conditions shall be set forth in the agreement with the
Participant which describes the Award.
18.3 Governing Law. The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the State of Colorado.
Section 19
Duration of the Plan.
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Option or Restricted Stock Award, or Stock shall be granted or
purchased after such termination. Options and Restricted Stock Awards
outstanding at the time of the Plan termination may continue to be exercised, or
become free of restrictions, or paid, in accordance with their terms.
Dated: ___________________________
ADOLPH COORS COMPANY
ATTEST:
____________________________ By:__________________________________
ADOLPH COORS COMPANY
EQUITY COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
Amended and Restated,
Effective February 16, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1 - INTRODUCTION 1
1.1 Establishment; Amendment and Restatement 1
1.2 Purposes 1
1.3 Effective Date 1
SECTION 2 - DEFINITIONS 1
2.1 Definitions 1
2.2 Gender and Number 2
SECTION 3 - PLAN ADMINISTRATION 2
SECTION 4 - STOCK SUBJECT TO THE PLAN 3
4.1 Number of Shares 3
4.2 Other Shares of Stock 3
4.3 Adjustments for Stock Split, Stock Dividend, Etc 3
4.4 Dividend Payable in Stock of Another Corporation, Etc 3
4.5 Other Changes in Stock 3
4.6 Rights to Subscribe 3
4.7 General Adjustment Rules 4
4.8 Determination by the Committee, Etc 4
SECTION 5 - PARTICIPATION 4
5.1 In General 4
5.2 Restriction on Award Grants to Certain Individuals 4
SECTION 6 - RESTRICTED STOCK AWARDS 4
6.1 Minimum Grant of Restricted Stock 4
6.2 Elective Grant of Restricted Stock 4
6.3 Date of Grant, Number of Shares 4
6.4 Retention of Award, Termination. 5
6.5 Restrictions 5
6.6 Lapse of Restrictions 5
6.7 Privileges of a Stockholder, Transferability 5
6.8 Enforcement of Restrictions 5
SECTION 7 - REORGANIZATION OR CHANGE OF CONTROL 5
7.1 Reorganization 5
7.2 Change of Control 6
SECTION 8 - RIGHTS OF DIRECTORS 6
8.1 Retention as Director 6
8.2 Nontransferability 6
<PAGE>
SECTION 9 - GENERAL RESTRICTIONS 6
9.1 Investment Representations 6
9.2 Compliance with Securities Laws 6
9.3 Changes in Accounting Rules 7
9.4 Withholding of Tax 7
SECTION 10 - PLAN AMENDMENT, MODIFICATION AND TERMINATION 7
SECTION 11 - REQUIREMENTS OF LAW 7
11.1 Requirements of Law 7
11.2 Federal Securities Law Requirements 7
11.3 Governing Law 7
SECTION 12 - DURATION OF THE PLAN 8
<PAGE>
ADOLPH COORS COMPANY
EQUITY COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
Amended & Restated,
Effective February 16, 1995
SECTION 1
INTRODUCTION
1.1 Establishment; Amendment and Restatement. Adolph Coors Company, a
Colorado corporation (the "Company"), established the Adolph Coors Company
Equity Compensation Plan for Non-Employee Directors (the "Plan") for those
directors ("Directors") of the Company who are neither officers nor employees
of the Company. The Plan provides for the grant of restricted stock awards to
Directors of the Company. Section 10 provides that the Company, by action of
the Board, may amend the Plan from time to time. The Plan is hereby amended
and restated, pursuant to resolutions adopted on August 13, 1992.
1.2 Purposes. The purposes of the Plan are to encourage the Directors to own
shares of the Company's stock and thereby to align their interests more
closely with the interests of the other shareholders of the Company, to
encourage the highest level of Director performance by providing the Directors
with a direct interest in the Company's attainment of its financial goals, and
to provide a financial incentive that will help attract and retain the most
qualified Directors.
1.3 Effective Date. The original Effective Date of the Plan was May 16, 1991.
The Effective Date of the amended and restated Plan is February 16, 1995. The
amended and restated Plan and each award granted under the amended and
restated Plan is conditioned on and shall be of no force or effect until
(a) approval of the amended and restated Plan by the holders of a majority of
the shares of voting stock of the Company and (b) receipt by the Company, in
form and substance satisfactory to counsel for the Company, of the concurrence
of the staff of the Securities and Exchange Commission with the opinions set
forth in a "no-action letter," related to Rule 16b-3 or any successor rule
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934 (the
"1934 Act"), unless the Company, on the advice of counsel, determines that
shareholder approval, a "no action letter," or both are not necessary.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth below:
(a)"Board" means the Board of Directors of the Company.
(b)"Committee" means a committee consisting of members of the Board who are
empowered hereunder to take actions in the administration of the Plan. The
Committee shall be so constituted at all times as to permit the Plan to comply
with Rule 16b-3. Members of the Committee shall be appointed from time to
time by the Board, shall serve at the pleasure of the Board and may resign at
any time upon written notice to the Board.
(c)"Director" means a member of the Board who is neither an officer nor an
employee of the Company. For purposes of the Plan, an employee is an
individual whose wages are subject to the withholding of federal income tax
under section 3401 of the Internal Revenue Code, and an officer is an
individual elected or appointed by the Board or chosen in such other manner as
may be prescribed in the bylaws of the Company to serve as such.
(d)"Disability" means a physical or mental condition of a Director that is
determined by the Social Security Administration to entitle the Director to a
Social Security disability benefit.
(e)"Fair Market Value" means the average of the highest and lowest prices of
the Stock as reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on a particular date. If there are no
Stock transactions on such date, the Fair Market Value shall be determined as
of the immediately preceding date on which there were Stock transactions. If
the price of the Stock is not reported on NASDAQ, the Fair Market Value of the
Stock on the particular date shall be as determined by the Committee using a
reference comparable to the NASDAQ system.
(f)"Internal Revenue Code" means the Internal Revenue Code of 1986, as it may
be amended from time to time.
(g)"Restricted Stock Award" means an award of Stock granted to a Director
pursuant to Section 6 that is subject to certain restrictions imposed in
accordance with the provisions of the Plan.
(h)"Stock" means the no par value Class B (non-voting) Common Stock of the
Company.
(i)"Voting Stock" means the $1.00 par value Class A Common Stock of the
Company.
2.2 Gender and Number. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.
SECTION 3
PLAN ADMINISTRATION
The Committee shall be responsible for the administration of the Plan.
However, the Committee shall have no authority, discretion or power to select
the Directors who will receive Restricted Stock Awards, determine the
Restricted Stock Awards to be granted pursuant to the Plan, the number of
shares of Stock to be issued thereunder or the time at which such Restricted
Stock Awards are to be granted, establish the duration and nature of
Restricted Stock Awards or alter any other terms or conditions specified in
the Plan, except in the sense of administering the Plan subject to the
provisions of the Plan. Subject to the foregoing limitations, the Committee,
by majority action thereof, is authorized to interpret the Plan, prescribe,
amend and rescind rules and regulations relating to the Plan, provide for
conditions and assurances deemed necessary or advisable to protect the
interests of the Company and make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. No member of the Committee
shall be liable for any action or determination made in good faith. The
determinations, interpretations and other actions of the Committee pursuant to
the provisions of the Plan shall be binding and conclusive for all purposes
and on all persons.
<PAGE>
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Fifty Thousand shares of Stock are authorized for
issuance under the Plan in accordance with the provisions of the Plan and
subject to such restrictions or other provisions as the Committee may from
time to time deem necessary. This authorization may be increased from time to
time by approval of the Board and by the shareholders of the Company if, in
the opinion of counsel for the Company, such shareholder approval is required.
Shares of Stock which are issued as Restricted Stock Awards shall be applied
to reduce the maximum number of shares of Stock remaining available for use
under the Plan. The Company shall at all times during the term of the Plan
retain as authorized and unissued Stock at least the number of shares from
time to time required under the provisions of the Plan, or otherwise assure
itself of its ability to perform its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to a
Restricted Stock Award and which are forfeited shall not be available for use
under the Plan. Any shares of Stock that for any other reason are not issued
to a Director shall automatically become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall at
any time increase or decrease the number of its outstanding shares of Stock or
change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or
changed in like manner as if they had been issued and outstanding, fully paid
and nonassessable at the time of such occurrence: (i) the shares of Stock as
to which Restricted Stock Awards may be granted under the Plan; and (ii) the
shares of the Stock then included in each outstanding Restricted Stock Award
granted hereunder.
4.4 Dividend Payable in Stock of Another Corporation, Etc. If the Company
shall at any time pay or make any dividend or other distribution upon the
Stock payable in securities or other property (except money or Stock), a
proportionate part of such securities or other property shall be set aside and
delivered to any Director then holding a Restricted Stock Award upon lapse of
all restrictions applicable to such Restricted Stock Award. Prior to the time
that any such securities or other property are delivered to a Director in
accordance with the foregoing, the Company shall be the owner of such
securities or other property and shall have the right to vote the securities,
receive any dividends payable on such securities and in all other respects
shall be treated as the owner. If securities or other property which have
been set aside by the Company in accordance with this Section are not
delivered to a Director because restrictions applicable to such Restricted
Stock Award do not lapse, then such securities or other property shall remain
the property of the Company and shall be dealt with by the Company as it shall
determine in its sole discretion.
4.5 Other Changes in Stock. In the event there shall be any change, other
than as specified in Sections 4.3 and 4.4, in the number or kind of
outstanding shares of Stock or of any stock or other securities into which the
Stock shall be changed or for which it shall have been exchanged, and if the
Committee shall in its discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to outstanding
Restricted Stock Awards or which have been reserved for issuance pursuant to
the Plan but are not then subject to a Restricted Stock Award, then such
adjustments shall be made by the Committee and shall be effective for all
purposes of the Plan and on each outstanding Restricted Stock Award that
involves the particular type of stock for which a change was effected.
4.6 Rights to Subscribe. If the Company shall at any time grant to the
holders of its Stock rights to subscribe pro rata for additional shares
thereof or for any other securities of the Company or of any other
corporation, there shall be reserved with respect to the shares then
outstanding pursuant to any Restricted Stock Award the Stock or other
securities which the Director would have been entitled to subscribe for if
immediately prior to such grant the restrictions applicable to such Restricted
Stock Award had lapsed. Upon the lapse of all restrictions applicable to
Stock held pursuant to a Restricted Stock Award the Director shall be provided
the opportunity to subscribe for the additional shares or other securities
issuable with respect to such shares of Stock.
4.7 General Adjustment Rules. No adjustment or substitution provided for in
this Section 4 shall require the Company to issue a fractional share of Stock,
and the total substitution or adjustment with respect to each Restricted Stock
Award shall be limited by deleting any fractional share. In the case of any
such substitution or adjustment appropriate adjustments shall be made to
Restricted Stock Awards to reflect any such substitution or adjustment.
4.8 Determination by the Committee, Etc. Adjustments under this Section 4
shall be made by the Committee, whose determinations with regard thereto shall
be final and binding upon all parties thereto.
SECTION 5
PARTICIPATION
5.1 In General. Each Director shall receive Restricted Stock Awards on the
terms and conditions set forth under the Plan. Each Director shall, if
required by the Committee, enter into an agreement with the Company, in such
form as the Committee shall determine and which is consistent with the
provisions of the Plan. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern.
5.2 Restriction on Award Grants to Certain Individuals. Notwithstanding the
foregoing provisions of Section 5.1, no Restricted Stock Awards shall be
granted to any lineal descendant of Adolph Coors, Jr. without the prior
written approval of counsel to the Company as to the effect of any such grant
on the possible status of the Company as a "personal holding company" within
the meaning of Section 542 of the Internal Revenue Code.
SECTION 6
RESTRICTED STOCK AWARDS
6.1 Minimum Grant of Restricted Stock. Beginning with the May 1991 annual
term, each Director shall receive twenty percent of the value of his annual
retainer as a director in the form of a Restricted Stock Award (the "Minimum
Grant").
6.2 Elective Grant of Restricted Stock. Also beginning with the May 1991
annual term, each Director may make an annual election (the "Election") to
receive any or all of the remaining cash balance of his annual retainer as a
director in the form of a Restricted Stock Award (the "Elective Grant"). The
Minimum Grant and the Elective Grant are hereafter referred to as the
"Grants". The Election must be in writing and must be delivered to the
Secretary of the Company no later than the last business day of the month
during which the annual meeting of shareholders of the Company is held. Any
Election made by a Director pursuant to this Section 6.2 shall be irrevocable.
6.3 Date of Grant, Number of Shares. The Minimum Grant shall be made on the
last business day of the month during which the annual meeting of shareholders
of the Company is held, and the Elective Grant shall be made on the first
business day that is at least six months and one day following the date of the
Minimum Grant. The total number of shares of Stock included in each such
Restricted Stock Award shall be determined by dividing the amount of the
Director's retainer that is to be paid in restricted stock by the Fair Market
Value of a share of Stock on the date of grant. In no event shall the Company
be required to issue fractional shares. Whenever under the terms of this
Section 6 a fractional share of Stock would otherwise be required to be
issued, an amount in lieu thereof shall be paid in cash based upon the Fair
Market Value of such fractional share.
6.4 Retention of Award, Termination. For grants made in 1994 and thereafter,
if a Director's services as a Board member are terminated at any time before
the completion of the Director's annual term of service, for any reason other
than the Director's death or Disability, all of the shares of Stock granted
pursuant to the Grants shall be forfeited. If a Director dies or becomes
Disabled at any time before completion of the Director's annual term of
service, the deceased or Disabled Director shall be vested in a portion of the
shares of Stock granted pursuant to the Grants. The number of vested shares
of Stock shall be determined by multiplying the number of shares of Stock
included in the Grants by a fraction, the denominator of which is the number
of scheduled quarterly directors' meetings for the annual director's term in
question, and the numerator of which is the number of scheduled quarterly
directors' meetings attended by the Director in such term. Any fractional
share shall be rounded down to the next whole share. The remaining number of
shares shall be nonvested and shall be forfeited. If the Director dies before
the Elective Grant is made for the annual term of service, the number of whole
shares in the vested portion of the Elective Grant shall be granted to the
Director's beneficiary at the time provided in Section 6.3.
6.5 Restrictions. Except as otherwise provided in the Plan, shares of Stock
received pursuant to a Restricted Stock Award may not be sold, assigned,
pledged, hypothecated, transferred or otherwise disposed of until the
restrictions applicable to such Stock have lapsed pursuant to Section 6.6.
6.6 Lapse of Restrictions. All restrictions on Stock covered by a Restricted
Stock Award shall lapse upon completion of the Director's annual term of
service during which the Restricted Stock Award was granted; provided,
however, that the shares may not be sold until at least six months after the
date of grant of the Stock.
6.7 Privileges of a Stockholder, Transferability. A Director shall have all
voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him as a Restricted Stock Award under
this Section 6. A Director's right to sell, encumber or otherwise transfer
Stock after restrictions applicable to such Stock have lapsed shall be subject
to the limitations of Section 8.2.
6.8 Enforcement of Restrictions. The Committee shall cause a legend to be
placed on the Stock certificates issued pursuant to each Restricted Stock
Award referring to the restrictions imposed in the Plan and, in addition, may
in its sole discretion require one or more of the following methods of
enforcing such restrictions:
(a) Requiring the Director to keep the Stock certificates, duly endorsed, in
the custody of the Company while the restrictions remain in effect; or
(b) Requiring that the Stock certificates, duly endorsed, be held in the
custody of a third party while the restrictions remain in effect.
SECTION 7
REORGANIZATION OR CHANGE OF CONTROL
7.1 Reorganization. In the event that the Company is merged or consolidated
with another corporation (other than a merger or consolidation in which the
Company is the continuing corporation and which does not result in any
reclassification or change of outstanding stock), or if all or substantially
all of the assets or more than 50% of the outstanding voting stock of the
Company is acquired by any other corporation, business entity or person (other
than a sale or conveyance in which the Company continues as a holding company
of an entity or entities that conduct the business or businesses formerly
conducted by the Company), or in case of a reorganization (other than a
reorganization under the United States Bankruptcy Code) or liquidation of the
Company, the Committee, or the board of directors of any corporation assuming
the obligations of the Company, shall, as to the Plan and outstanding
Restricted Stock Awards, either (i) make appropriate provision for the
adoption and continuation of the Plan by the acquiring or successor
corporation and for the protection of any such outstanding Restricted Stock
Awards by the substitution on an equitable basis of appropriate stock of the
Company or of the merged, consolidated or otherwise reorganized corporation
which will be issuable with respect to the Stock, provided that no additional
benefits shall be conferred upon the Directors holding such Restricted Stock
Awards as a result of such substitution, or (ii) accelerate the restriction
period for any outstanding Restricted Stock Awards so that all restrictions
applicable to Restricted Stock Awards shall lapse prior to any such event.
7.2 Change of Control. In the event of a change of control of the Company, as
defined below, then all restrictions with respect to outstanding Restricted
Stock Awards shall immediately lapse. For purposes of the Plan, a "change of
control" shall be deemed to have occurred if during any period of two
consecutive years (not including any period prior to the Effective Date),
individuals who at the beginning of such period constitute the Board (and any
new director whose election by the Board or whose nomination for election by
the Company's shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof.
SECTION 8
RIGHTS OF DIRECTORS
8.1 Retention as Director. Nothing contained in the Plan or in any
Restricted Stock Award granted under the Plan shall interfere with or limit in
any way the right of the shareholders of the Company to remove any Director
from the Board pursuant to the bylaws of the Company, nor confer upon any
Director any right to continue in the service of the Company.
8.2 Nontransferability. No right or interest of any Director in a Restricted
Stock Award (prior to the completion of the restriction period applicable
thereto), granted pursuant to the Plan, shall be assignable or transferable
during the lifetime of the Director, either voluntarily or involuntarily, or
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of a Director's death, a Director's rights and
interests in Restricted Stock Awards shall, to the extent provided in
Section 6, be transferable by testamentary will or the laws of descent and
distribution. If in the opinion of the Committee a person entitled to
payments or to exercise rights with respect to the Plan is disabled from
caring for his affairs because of mental condition, physical condition or age,
payment due such person may be made to, and such rights shall be exercised by,
such person's guardian, conservator or other legal personal representative
upon furnishing the Committee with evidence satisfactory to the Committee of
such status.
SECTION 9
GENERAL RESTRICTIONS
9.1 Investment Representations. The Company may require any Director to whom
a Restricted Stock Award is granted, as a condition of receiving such
Restricted Stock Award, to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that such person is
acquiring the Stock subject to the Restricted Stock Award for his own account
for investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with Federal and applicable state
securities laws.
9.2 Compliance with Securities Laws. Each Restricted Stock Award shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration or qualification of the shares
subject to such Restricted Stock Award upon any securities exchange or under
any state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of, or in connection with, the
issuance of shares thereunder, such Restricted Stock Award may not be accepted
or exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained on
conditions acceptable to the Committee. Nothing herein shall be deemed to
require the Company to apply for or to obtain such listing, registration or
qualification.
9.3 Changes in Accounting Rules. Notwithstanding any other provision of the
Plan to the contrary, if, during the term of the Plan, any changes in the
financial or tax accounting rules applicable to Restricted Stock Awards shall
occur which, in the sole judgment of the Committee, may have a material
adverse effect on the reported earnings, assets or liabilities of the Company,
the Committee shall have the right and power to modify as necessary any then
outstanding Restricted Stock Awards as to which the applicable restrictions
have not been satisfied.
9.4 Withholding of Tax. To the extent required by applicable law and
regulation, each Director must arrange with the Company for the payment of any
federal, state or local income or other tax applicable to the Restricted Stock
Award granted hereunder before the Company shall be required to deliver to the
Director a certificate for such Stock free and clear of all restrictions under
this Plan.
SECTION 10
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or modify
the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that shareholder approval is otherwise necessary
or desirable and, provided further that no amendment or modification shall be
made more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employment Retirement Income Security Act, or
the rules promulgated thereunder.
No amendment, modification or termination of the Plan shall in any
manner adversely affect any Restricted Stock Awards theretofore granted under
the Plan without the consent of the Director holding such Restricted Stock
Awards.
SECTION 11
REQUIREMENTS OF LAW
11.1 Requirements of Law. The issuance of stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
11.2 Federal Securities Law Requirements. Awards granted hereunder shall be
subject to all conditions required under Rule 16b-3 to qualify the Restricted
Stock Award for any exception from the provisions of Section 16(b) of the 1934
Act available under that Rule. Such conditions shall be set forth in the
agreement with the Director which describes the Restricted Stock Award.
11.3 Governing Law. The Plan and all agreements hereunder shall be construed
in accordance with and governed by the laws of the State of Colorado.
SECTION 12
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Restricted Stock Award shall be granted after such
termination. Restricted Stock Awards outstanding at the time of the Plan
termination shall become free of restrictions in accordance with their terms.
Dated: ______________________
ATTEST: ADOLPH COORS COMPANY
_____________________________By:
Secretary
