Document:

samg-ex102_7.htm

Exhibit 10.2

Silvercrest Asset Management Group Inc.
2012 Equity Incentive Plan

Nonqualified Stock Option Agreement

 

Participant: Richard R. Hough, III

 

Grant Date: October 1, 2018

 

Per Share Exercise Price: $_____

 

Number of Shares of Stock subject to this Option: _____________________

 

Vesting schedule: 

 

This Option may be exercised with respect to the first 33% of the shares subject to this Option on the first anniversary date of the Grant Date, an additional 33% of the shares subject to this Option on the second anniversary of the Grant Date, and all remaining shares subject to this Option on the third anniversary of the Grant Date (in each case, subject to the Participant’s continued service with the Company or any of its Subsidiaries through the applicable vesting date).

 

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This Nonqualified Stock Option Award Agreement (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Silvercrest Asset Management Group Inc., a Delaware corporation, (the “Company”) and the Participant specified above, pursuant to the Silvercrest Asset Management Group Inc. 2012 Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee; and

Whereas, it has been determined that it would be in the best interests of the Company to grant the nonqualified stock option provided for herein to the Participant.

Now, therefore, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

1.Incorporation by Reference; Plan Document Receipt.  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan or Exhibit A to this Agreement.  The Participant 

 

 

hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.  No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.

2.Grant of Option.  The Company hereby grants to the Participant, as of the Grant Date specified above, a nonqualified stock option (this “Option”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Stock specified above (the “Option Shares”).  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall have no rights as a stockholder with respect to any shares of Stock covered by this Option unless and until the Participant has become the holder of record of the shares of Stock, and no adjustments shall be made for dividends in cash or other property, distributions, or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan or this Agreement.

3.Vesting; Forfeiture, Expiration.

(a)Vesting.  The Option subject to this grant shall become vested in accordance with the vesting schedule above.  All vesting of the Option granted hereunder shall occur only on the appropriate vesting date specified above, subject to the Participant’s continued service with the Company or any of its Affiliates through each applicable vesting date.  There shall be no proportionate or partial vesting in the periods before each vesting date.

(b)Accelerated Vesting Upon Certain Terminations.  Subject to the immediately following sentence, if the Participant incurs a Separation from Service (as defined below) as a result of (i) an involuntary termination by the Company or its Affiliates without Cause,  (ii) the Participant’s termination of employment for Good Reason, or (iii) the Participant’s death or Disability, then, in each case, any portion of the Option unvested as of such date shall become fully and immediately vested. The Participant’s Separation from Service described in sublcauses (i) and (ii) of the immediately preceding sentence shall result in accelerated vesting conditioned on and subject to the Participant’s compliance with Sections 6 and 7 of that certain letter agreement, dated as of September 18, 2018, by and between the Participant and Silvercrest Asset Management Group LLC (the “Employment Agreement”).  

(c)Forfeiture of Option.  Notwithstanding anything herein to the contrary, (A) upon the Participant’s “separation from service,” as defined in Section 409A of the Code and Treasury Regulation Section 1.409A-1(h) from the Company and its Affiliates (a “Separation from Service”) for any or no reason, 100% of any and all unvested portion of the Option outstanding as of the date of such Separation from Service (other than any unvested portion of the Option that becomes vested as of the date of such Separation from Service in accordance with Section 3(b)) shall be immediately forfeited and cancelled for no consideration, and shall cease to be outstanding, and (B) upon the Participant’s Separation from Service from the Company and its Affiliates for Cause, 100% of the Option (whether vested or unvested) 

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outstanding as of the date of such Separation from Service shall be immediately forfeited and cancelled for no consideration, and shall cease to be outstanding. 

(d)Expiration.  The term of the Option shall be until the fifth anniversary of the Grant Date, after which time it shall expire (such fifth anniversary date, the “Expiration Date”), subject to earlier Separation from Service in the event of the Participant’s Separation from Service as specified in the Plan and this Agreement.  Upon the Expiration Date, the Option (whether vested or not) shall automatically be cancelled for no consideration, shall no longer be exercisable, and shall cease to be outstanding.  

4.Detrimental Activity.  

(a)Unless otherwise determined by the Committee, (A) in the event the Participant engages in any Detrimental Activity prior to any exercise of the Option, all Options held by the Participant shall thereupon terminate and expire, (B) as a condition of the exercise of the Option, the Participant shall be required to certify in a manner acceptable to the Company (or shall be deemed to have certified) that the Participant is in compliance with the terms and conditions of the Plan and that the Participant has not engaged in, and does not intend to engage in, any Detrimental Activity, and (C) in the event the Participant engages in Detrimental Activity during the 18-months commencing on the earlier of the date the Option is exercised or the date of the Participant’s Separation from Service, the Company shall be entitled to recover from the Participant at any time within 18-months after such date, and the Participant shall pay over to the Company, an amount equal to any gain realized (whether at the time of exercise or thereafter) as a result of the exercise. This Section 4(a) shall cease to apply upon a Change of Control.  

(b)The Participant hereby acknowledges and agrees that (i) the Company’s present and future business relationships with its Clients, employees, vendors, suppliers and lenders are and will continue to be of a type which normally continue unless interfered with by others, and (ii) any statements or actions taken by the Participant to induce any Client, employee, vendor, supplier or lender to terminate, reduce or not renew any business arrangement with the Company (unless the Company determines that the termination, reduction or non-renewal is in the best interest of the Company) or to enter into any business arrangement within the Company’s line of business with any Person other than the Company would cause irreparable harm to the Company. The Participant further acknowledges and agrees that the services such Participant is to render to the Company are of a special character, with a value to the Company the loss of which cannot adequately be compensated by damages or an action at law. Further, the Participant acknowledges and agrees that if he or she were to become an equity owner of a competing organization, such Participant’s new obligations and the products, services and technology of the competing organization would be so similar or related to those contemplated by this Agreement that it would be very difficult for such Participant not to rely on or use the Company’s confidential information.  Accordingly, the Participant acknowledges and agrees that the restrictions herein regarding Detrimental Activity are necessary for the protection of the business and goodwill of the Company and its Affiliates.

(c)The Participant hereby acknowledges and agrees that it is fair and reasonable that he or she make the covenants and undertakings set forth in Section 4 and has done so with the benefit of the advice of counsel. Furthermore, the Participant agrees that any 

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breach or attempted breach by him or her of the provisions of Section 4 of this Agreement will cause irreparable harm to the Company for which monetary damages will not be an adequate remedy. Accordingly, the Company shall be entitled to apply for and obtain injunctive relief (temporary, preliminary and permanent) in order to restrain the breach or threatened breach of, or otherwise to specifically enforce, any of the provisions of Section 4 without the requirement to post a bond or provide other security. Nothing herein shall be construed as a limitation or waiver of any other rights or remedies that may be available to the Company for such breach or threatened breach.  The Participant further agrees that the subject matter and duration of the restrictions set forth herein are reasonable in light of the facts as they exist today. 

5.Termination.  Subject to the terms of the Plan and this Agreement, the Option, to the extent vested at the time of the Participant’s Separation from Service, shall remain exercisable as follows:

(a)Termination due to Death or Disability.  In the event of the Participant’s Separation from Service by reason of death or Disability, the vested portion of this Option shall remain exercisable until the earlier of (i) one year from the date of such Separation from Service, and (ii) the Expiration Date.

(b)Termination Without Cause.  In the event of the Participant’s involuntary Separation from Service by the Company without Cause, the vested portion of this Option shall remain exercisable until the earlier of (i) ninety days from the date of such Separation from Service, and (ii) the Expiration Date.

(c)Voluntary Termination.  In the event of the Participant’s voluntary Separation from Service, the vested portion of this Option shall terminate and expire upon such Separation from Service.

(d)Termination for Cause.  In the event of the Participant’s Separation from Service by the Company for Cause (or in the event of a voluntary Separation from Service by the Participant after the occurrence of an event that would be grounds for a Separation from Service for Cause), the Option granted hereunder (whether or not vested) shall terminate and expire upon such Separation from Service.

(e)Treatment of Unvested Option upon Termination.  Any portion of this Option that is not vested as of the date of the Participant’s Separation from Service for any reason shall terminate and expire as of the date of such Separation from Service.

6.Method of Exercise and Payment.  Subject to Sections 4 and 5 hereof, to the extent that the Option has become vested and exercisable with respect to a number of shares of Stock as provided herein, the Option may thereafter be exercised by the Participant with respect to a whole number of Option Shares, in whole or in part, at any time or from time to time before the expiration of the Option as provided herein and in accordance with Section 7.1(e) of the Plan, including, without limitation, by the delivery of any form of exercise notice as may be required by the Committee and payment in full of the Per Share Exercise Price multiplied by the number of shares of Stock underlying the portion of the Option exercised.

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7.Non-transferability.  The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not, prior to vesting, be sold, exchanged, transferred, assigned, or otherwise disposed of in any way by the Participant (or any beneficiary(ies) of the Participant), other than by testamentary disposition by the Participant or the laws of descent and distribution.  Any attempt to sell, exchange, transfer, assign, pledge, encumber, or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment, or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

8.Governing Law.  All questions concerning the construction, validity, and interpretation of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to its principles of conflicts of laws.

9.Withholding of Tax.  The Company or any Affiliate shall have the power and the right to deduct or withhold, require the Participant to remit to the Company or such Affiliate, or make any other arrangements as it considers appropriate to ensure that it has received an amount sufficient to satisfy any federal, state, local, and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) that the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule, or regulation with respect to the Option and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Stock otherwise required to be issued pursuant to this Agreement.

10.Recoupment Policy.  The Participant acknowledges and agrees that this Option (including any shares of Stock issued upon exercise thereof) shall be subject to the terms and provisions of any “clawback” or recoupment policy that may be adopted by the Company or its Affiliates from time to time or as may be required by any applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder).

11.Notices.  Any notice or communication given hereunder shall be in writing and shall be deemed to have been duly given: (i) when delivered in person; (ii) two days after being sent by United States mail; or (iii) on the first business day following the date of deposit if delivered by a nationally recognized overnight delivery service, in each case, to the appropriate party at the address set forth below (or such other address as the party may from time to time specify):

If to the Company, to:

c/o Silvercrest Asset Management Group Inc.

1330 Avenue of the Americas

New York, NYC 10019
Attention: Office of the General Counsel

 

with a copy (which shall not constitute notice) to:

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Proskauer Rose LLP
Eleven Times Square
New York, NY 10036-8299
Attention:

If to the Participant, to the address on file with the Company.

12.No Right to Employment.  Nothing in this Agreement shall affect the right of the Company or any of its Affiliates to terminate the Participant’s employment at any time, with or without Cause, or shall be deemed to create any rights to employment or continued employment.  The rights and obligations arising under this Agreement are not intended to and do not affect the Participant’s employment relationship that otherwise exists between the Participant and the Company or any of its Affiliates, whether such employment relationship is at will or defined by an employment contract.  Moreover, this Agreement is not intended to and does not amend any existing employment contract between the Participant and the Company or any of its Affiliates; to the extent there is a conflict between this Agreement and such an employment contract, the employment contract shall govern and take priority.

13.Data Protection.  By executing this Agreement, the Participant hereby consents to the holding and processing of personal information provided by the Participant to the Company, any Affiliate thereof, trustee, or third party service provider, for all purposes relating to the operation of the Plan.  These include, but are not limited to: (i) administering and maintaining Participant records; (ii) providing information to the Company, its Affiliates, trustees of any employee benefit trust, registrars, brokers, or third-party administrators of the Plan; (iii) providing information to future purchasers or merger partners of the Company or any Affiliate thereof, or the business in which the Participant works; and (iv) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.

14.Market Stand-Off.  If requested by the Company, any Affiliate, or a lead underwriter of any public offering of the shares of Stock (a “Lead Underwriter”), the Participant shall irrevocably agree, and by execution of this Agreement shall irrevocably be deemed to have agreed, not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge, or otherwise transfer or dispose of, any interest in any shares of Stock or any securities convertible into, derivative of, or exchangeable or exercisable for shares of Stock, or any other rights to purchase or acquire shares of Stock (except shares of Stock included in such public offering or acquired on the public market after such offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that a Lead Underwriter shall specify (the “Lock-up Period”).  The Participant hereby further agrees to sign such documents as may be requested by a Lead Underwriter, the Company, or any Affiliate to effect the foregoing and agree that the Company or an Affiliate may impose stop transfer instructions with respect to shares of  Stock acquired pursuant to an Award until the end of such Lock-up Period.

15.Compliance with Laws.  The issuance of this Option (and the shares of Stock upon exercise of this Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules, 

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and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act, and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue this Option or any of the shares of Stock pursuant to this Agreement if any such issuance would violate any such requirements.

16.Section 409A.  Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A and shall be limited, construed, and interpreted in accordance with such intent.

17.Binding Agreement; Assignment.  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign any part of this Agreement without the prior express written consent of the Company.

18.Headings.  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

19.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute the same instrument.

20.Severability.  If any provision of this Agreement is declared or found to be illegal, unenforceable or void, in whole or in part, then the parties hereto shall be relieved of all obligations arising under such provision, but only to the extent that it is illegal, unenforceable or void, it being the intent and agreement of the parties hereto that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objectives.

21.Entire Agreement; Amendment.  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.

22.Mode of Communications.  The Participant agrees, to the fullest extent permitted by applicable law, in lieu of receiving documents in paper format, to accept electronic delivery of any documents that the Company or any of its Affiliates may deliver in connection with this Option grant and any other grants offered by the Company or its Affiliates, including, without limitation, prospectuses, grant notifications, account statements, annual or quarterly reports, and other communications.  Electronic delivery of a document may be made via the 

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Company’s email system or by reference to a location on the Company’s intranet, an internet website, or the online brokerage account system.

23.Acquired Rights.  The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary and shall not be considered as part of such salary in the event of severance, redundancy, or resignation.

 

Remainder of Page Intentionally Left Blank

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

	
 
	
 
	
 

	
Silvercrest Asset Management Group Inc.

	
 
	
 

	
By:
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

	
 

	
Participant

	
 

	
 

	
Name:
	
 
	
 Richard R. Hough, III

 

	
 
	
 
	
 

	
Social Security Number:
	
 
	
 

 

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EXHIBIT A

DEFINITIONS

 

“Cause” has the meaning set forth in the Silvercrest LPA.

“Detrimental Activity” means

(a)without written authorization from the Company, disclosure to any Person outside the Company or the use in any manner, except as necessary in the furtherance of Participant’s responsibilities to the Company, at any time, of any confidential information, trade secrets or proprietary information relating to the business of the Company that is acquired by the Participant at any time prior to the Participant’s termination.  For avoidance of doubt, nothing in this Agreement shall be construed to prohibit the Participant from (i) responding truthfully to a valid subpoena; (ii) filing a charge or complaint with, or participating in any investigation conducted by, a governmental agency including the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Equal Employment Opportunity Commission and/or any state or local human rights agency or Inspector General; or (iii) filing, testifying or participating in or otherwise assisting in a proceeding relating to, or reporting, an alleged violation of any federal, state or municipal law relating to fraud or any rule or regulation of the Securities Exchange Commission, the Commodity Futures Trading Commission or any self-regulatory organization (including, but not limited to, the Financial Industry Regulatory Authority), or making other disclosures or taking other actions (including, without limitation, receiving any whistleblower award provided for under such laws or regulations) that are protected under the whistleblower provisions of federal or state law or regulation.  Prior authorization of the Company shall not be required to make any reports or disclosures under this Paragraph and the Participant is not required to notify the Company that the Participant has made such reports or disclosures;

(b)any activity while employed or performing services that results, or if known could have reasonably been expected to result, in the Participant’s termination for Cause; 

(c)without written authorization from the Company, directly or indirectly, in any capacity whatsoever, (i) engage or hold interests in other business ventures of any kind that creates or appears to create a conflict of interest with such Participant’s responsibilities with respect to the Company and its Clients without the prior approval in writing of the Company.  The restrictions set forth in this (c) shall not prohibit the ownership of a less than 2% interest in any Person if the securities of such Person are publicly traded.

(d)engaging, individually or through an agent, for such Participant or on behalf of another, as an employee, director, owner, partner, member, sole proprietor, consultant, agent, representative, shareholder, or in any other manner or capacity whatsoever in the following: (A) contacting, directly or indirectly, any Client or otherwise solicit or inducing or attempting to solicit or induce any Client with whom the Participant has dealt, to terminate, reduce or not renew its relationship with the Company; (B) accepting any business involving or relating to the business of the Company from any Client with whom the Participant has dealt during the 

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Restricted Period, or entering into a business relationship involving or relating to the business of the Company with any such Client (unless approved by the Company in writing); (C) making any statement or take any action that may interfere with the Company’s business relationship with any Client, vendor, supplier or lender; (D) inducing or soliciting or attempting to induce or solicit any vendor, supplier or lender of the Company to terminate, reduce or not renew its relationship with the Company; or (E) soliciting or inducing any individual then employed by the Company to terminate such employment, or hire or attempt to hire any individual who is, or was during the Restricted Period, employed by or associated with the Company as an employee, independent contractor or agent;

(e)a material breach of any restrictive covenant contained in any agreement between the Participant and the Company; or

(f)the Participant’s Disparagement, or inducement of other to do so, of the Company or its Affiliates or their past or present officers, directors, employees or products.  

For purposes of Detrimental Activity, the term “Company” shall be deemed to include its Affiliates.  Only the Chief Executive Officer or the Chief Financial Officer of the Company (or his designee, as evidenced in writing) shall have the authority to provide the Participant, except for himself or herself, with written authorization to engage in the activities contemplated in subsections (a) and (c) of the definition of Detrimental Activity. 

“Disability” has the meaning set forth in the Slivercrest LPA.

“Disparagement” means making comments or statements to the press, the Company’s or its Affiliate’s employees, consultants or any individual or entity with whom the Company of its Affiliates has a business relationship which could reasonably be expected to adversely affect in any manner: (a) the conduct of the business of the Company or its Affiliates (including, without limitation, any products or business plans or prospects); or (b) the business reputation of the Company or its Affiliates, or any of their products, or their past or present officers, directors or employees.

“Good Reason” has the meaning set forth in the Employment Agreement, including the notice and cure provisions set forth therein.

“Restricted Period” means the period beginning on the date of Separation from Service of the Participant with the Company and ending on the 18-month anniversary thereof, (B) “Person” means and includes an individual and any legal entity including a corporation, partnership, association, limited liability company, joint stock company, trust or estate, and (C) the term “Client” shall include all Past Clients, and Present Clients, subject to the following general rule: with respect to each such Client, the term shall also include any Persons which are known to the Participant to be Affiliates of such Client. Past Clients, Potential Clients and Present Clients shall be defined as follows:

“Past Client” shall mean, at any particular time, any Person who at any point within the five years prior to such time had been a recipient of services from the Company (including, without limitation, its predecessors) or its Affiliates but at such time is not a recipient of services from the Company or its Affiliates.

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“Potential Client” shall mean, as of any time of determination, any Person to whom the Company (including without limitation, its predecessors) or its Affiliates has offered to provide investment products or services at any point during the period of two (2) years immediately preceding such time of determination (but who has not become a recipient of investment products or services from the Company or its Affiliates).

“Present Client” shall mean, at any particular time, any Person who is at such time a recipient of services from the Company or its Affiliates.

 

“Silvercrest LPA” means that certain Second Amended and Restated Limited Partnership Agreement of Silvercrest L.P. executed as of November 13, 2012.

3Blueprint

 

 

EXCHANGE AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the “Agreement”), dated as of
September 20, 2018, is
made by and between New Age Beverages Corporation, a Washington
corporation (“Company”), and the holder of shares of
common stock, $.001 par value per share of the Company (the
“Common Stock”), signatory hereto (each a
“Holder”).

 

WHEREAS, the Holder
is willing to exchange such number of shares of Common Stock as set
forth on Schedule A
(the “Exchange Securities”);

 

WHEREAS, the
Company has authorized a new series of convertible preferred stock
of the Company designated as Series C Convertible Preferred Stock,
$0.001 par value, the terms of which are set forth in the
Certificate of Designation of Preferences, Rights and Limitations
of Series C Convertible Preferred Stock (the “Certificate of
Designations”) in the form attached hereto as Exhibit A (together with any
convertible preferred shares issued in replacement thereof in
accordance with the terms thereof, the “Preferred
Stock”), which Preferred Stock shall be convertible into the
Company’s Common Stock, in accordance with the terms of the
Certificate of Designations;

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to exchange with
the Holder, and the Holder desires to exchange with the Company,
the Exchange Securities for shares of the Company’s Preferred
Stock.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and Holder agree as follows:

 

1.
Terms of the
Exchange. The Company and Holder agree that the Holder will
exchange the Exchange Securities and will relinquish any and all
other rights he may have under the Exchange Securities in exchange
for such number of shares of Preferred Stock (the “Preferred
Shares”, and such Preferred Shares as converted into Common
Stock, the “Conversion Shares”, and together with the
Common Shares and the Preferred Shares, the
“Securities”) as set forth on Schedule A, annexed
hereto.

 

2.
Closing. Upon
satisfaction of the conditions set forth herein, a closing shall
occur at the principal offices of the Company, or such other
location as the parties shall mutually agree. At closing, Holder
shall deliver the Exchange Securities to the Company pursuant to
this Agreement and the Company shall deliver to such Holder a
certificate evidencing the Preferred Shares, in the name(s) and
amount(s) as indicated on Schedule A annexed hereto. Upon
closing the Exchange Securities shall be cancelled and Holder will
have no remaining rights, powers, privileges, remedies or interests
under the Exchange Securities.

 

3. Further Assurances. Each party
shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as any
other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

 

4.
Representations and
Warranties of the Holder. The Holder represents and warrants
as of the date hereof and as of the closing to the Company as
follows:

 

 

 

 

a.           Authorization;
Enforcement. The Holder
has the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of this Agreement
by the Holder and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Holder and no further action is
required by the Holder.  This Agreement has been (or upon
delivery will have been) duly executed by the Holder and, when
delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Holder enforceable against the
Holder in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

b.            Information
Regarding Holder. Holder is an “accredited
investor”, as such term is defined in Rule 501 of Regulation
D promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act,
is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of
companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial,
tax and other business matters as to enable the Holder to utilize the information made
available by the Company to evaluate the merits and risks of and to
make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. Holder has the
authority and is duly and legally qualified to purchase and own the
Securities. Holder is able to bear the risk of such investment for
an indefinite period and to afford a complete loss
thereof.

 

c.           Legend.
The Holder understands that the Securities have been issued (or
will be issued in the case of the Conversion Shares) pursuant to an
exemption from registration or qualification under the Securities
Act and applicable state securities laws, and except as set forth
below, the Securities shall bear any legend as required by the
“blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may
be placed against transfer of such stock
certificates):

 

[NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO
THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

 

 

 

d.           Restricted
Securities. The Holder
understands that: (i) the Securities have not been and are not
being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) the
Holder shall have delivered to the Company (if requested by the
Company) an opinion of counsel to the Holder, in a form reasonably
acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration, or (C) the Holder
provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A promulgated under the Securities Act (or a successor rule
thereto) (collectively, “Rule 144”); (ii) any sale of
the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144, and further, if Rule 144 is
not applicable, any resale of the Securities under circumstances in
which the seller (or the Person through whom the sale is made) may
be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption
under the Securities Act or the rules and regulations of the SEC
promulgated thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption
thereunder.

 

5. Representations and
Warranties of the Company. The
Company hereby makes the following representations and warranties
to the Holder:

 

a.           
Authorization;
Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the
transactions contemplated by this Agreement and each of the other
agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the
“Exchange Documents”) and otherwise to carry out its
obligations hereunder and thereunder.  The execution and
delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of
Directors of the Company or the Company’s stockholders in
connection therewith, including, without limitation, the issuance
of the Preferred Shares, and the reservation for issuance and
issuance of Conversion Shares issuable upon conversion of the
Preferred Shares have been duly authorized by the Company's Board
of Directors and no further filing, consent, or authorization is
required by the Company, its Board of Directors or its
stockholders.  This Agreement and any Other Agreement (as
defined herein) have been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.

 

b.           
Organization and
Qualification. Each of the Company and its subsidiaries (the
“Subsidiaries”) are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in
which they are formed, and have the requisite power and
authorization to own their properties and to carry on their
business as now being conducted and as presently proposed to be
conducted. Each of the Company and each of its Subsidiaries is duly
qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the
business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects
of the Company or any Subsidiary, individually or taken as a whole,
(ii) the transactions contemplated hereby or in any of the other
Exchange Documents or (iii) the authority or ability of the Company
to perform any of its obligations under any of the Exchange
Documents.

 

 

 

 

 

c.           
No Conflict. The
execution, delivery and performance of the Exchange Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance of the Preferred Shares and reservation for issuance and
issuance of the Conversion Shares) will not (i) (i) result in a
violation of the Certificate of Incorporation (as defined below) or
other organizational documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its
Subsidiaries or Bylaws (as defined below) of the Company or any of
its Subsidiaries, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign,
federal and state securities laws and regulations and the rules and
regulations of the Nasdaq Stock Market (the “Principal
Market”) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected except, in the case of clause
(ii) or (iii) above, to the extent such violations that could not
reasonably be expected to have a Material Adverse
Effect.

 

d.           
No Consents.
Neither the Company nor any Subsidiary is required to obtain any
consent from, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory
or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its respective obligations under
or contemplated by the Exchange Documents, in each case, in
accordance with the terms hereof or thereof, except as previously
obtained. All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to
obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date of this Agreement, and neither the
Company nor any of its Subsidiaries is aware of any facts or
circumstances which might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration,
application or filings contemplated by the Exchange
Documents.

 

e.           Securities
Law Exemptions. Assuming the
accuracy of the representations and warranties of the Holder
contained herein, the offer and issuance by the Company of the
Securities is exempt from registration under the Securities Act.
The offer and issuance of the Securities is exempt from
registration under the Securities Act pursuant to the exemption
provided by Section 3(a)(9) thereof. The Company covenants and
represents to the Holder that neither the Company nor any of its
Subsidiaries has received, anticipates receiving, has any agreement
to receive or has been given any promise to receive any
consideration from the Holder or any other Person in connection
with the transactions contemplated by the Exchange
Documents.

 

f.           Issuance
of Securities. The issuance of
the Preferred Shares are duly authorized and upon issuance in
accordance with the terms of the Exchange Documents shall be
validly issued, fully paid and non-assessable and free from all
taxes, liens, charges and other encumbrances with respect to the
issue thereof. Upon issuance or conversion in accordance with the
Certificate of Designations, the Conversion Shares, when issued,
will be validly issued, fully paid and nonassessable and free from
all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common
Stock.

 

6. Miscellaneous.

 

a. Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.

 

 

 

 

 

b. Governing Law. This Agreement
shall be governed by and construed under the laws of the State of
Washington without regard to the choice of law principles
thereof.

 

 

c. Severability.
If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in
any other jurisdiction.

 

 

d. Counterparts/Execution.
This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an
e-mail which contains an electronic file of an executed signature
page, such signature page shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile or electronic file signature page (as the case may be)
were an original thereof.

 

 

e. Entire Agreement; Amendments.
This Agreement constitutes the entire agreement between the parties
with regard to the subject matter hereof and thereof, superseding
all prior agreements or understandings, whether written or oral,
between or among the parties. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument
signed by all parties, or, in the case of a waiver, by the party
waiving compliance. Except as expressly stated herein, no delay on
the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or
privilege hereunder.

 

 

f. Headings.
The headings used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement.

 

(Signature
Pages Follow)

 

 

 

 

 

IN WITNESS WHEREOF, the parties have
caused this Agreement to be duly executed as of the day and year
first above written.

 

NEW AGE
BEVERAGES CORPORATION

 

 

 

By:        
/s/ Charles
Ence                                   

Name:
Charles Ence

Title:
Vice President Finance

 

 

HOLDER:

 

 

 

/s/ Brent
Willis                       
 
                         

Brent
Willis

 

 

 

/s/ Neil
Fallon                 
 
                                 

Neil
Fallon

 

 

 

 

SCHEDULE
A

 

	

Name of Holder

	

Number of Shares of Common Stock to be Exchanged

	

Number of Shares of
Preferred Stock to be Issued

	

 Brent
Willis

	

1,773,000

	

1,773

	

 Neil
Fallon

	

5,127,000

	

5,127

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