Document:

Filed by Bowne Pure Compliance

 

EXHIBIT 10.63

			
	 	 	 
	Option No. 987
	 	Roper           

THE BOSTON BEER COMPANY, INC.

STOCK OPTION AGREEMENT

AGREEMENT entered into effective as of January 1, 2008, by and between THE BOSTON BEER
COMPANY, INC., a Massachusetts corporation (the “Company”), and Martin F. Roper, the Company’s
President and Chief Executive Officer (“Mr. Roper”).

IN CONSIDERATION OF services rendered and to be rendered by Mr. Roper to the Company and of
the mutual covenants and agreements contained herein, the Company and Mr. Roper hereby agree as
follows:

1. Grant of Option. The Company hereby irrevocably grants to Mr. Roper an option (the
“Option”) to purchase all or any part of an aggregate of Seven Hundred Fifty-Three Thousand Eight
Hundred Sixty-Four (753,864) shares (the “Shares”) of the Company’s Class A Common Stock, on the
terms and conditions hereinafter set forth.

2. Exercise Price and Vesting of Exercisability.

(a) Exercise Price. Subject to the provisions of Sections 2(b) and 2(c), the Exercise Price
(“Exercise Price”) for the Shares shall be determined by multiplying (i) $42.00 by (ii) the
aggregate change in the DJ Wilshire 5000 Index or in a successor broad market index selected by the
Compensation Committee of the Company’s Board of Directors, if the DJ Wilshire 5000 Index ceases to
exist (in either case, the “Index”) from and after January 1, 2008 through the close of business on
the trading date next preceding each date on which Mr. Roper exercises the Option (the
“Determination Date”). The aggregate change in the Index shall be determined by dividing the Index
as of the Determination Date by the Index as of the close of business on December 31, 2007.

(b) Minimum Exercise Price. Notwithstanding the provisions of Section 2(a), the Exercise Price
shall in all events be not less than $37.65.

(c) Cap on Option Value. Notwithstanding the provisions of Section 2(a), if the excess of (i)
the closing price of the Company’s Class A Common Stock on the New York Stock Exchange or on any
other exchange on which such shares may be traded, on the day next preceding a date on which Mr.
Roper exercises the Option over (ii) the Exercise Price determined in accordance with Section 2(a)
is greater than $70.00, the Exercise Price shall be increased to the extent necessary to reduce
such excess (i.e., the excess as of the close of business on the trading date next preceding the
date on which Mr. Roper exercises the Option) to $70.00.

(d) Vesting Schedule. So long as Mr. Roper continues to be employed by the Company or an
affiliate of the Company, the Option shall become exercisable as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Incremental	 	 	Cumulative	 
	 	 	Shares Vested	 	 	Shares Vested	 
	 
	 	 	 	 	 	 	 	 
	January 1, 2014
	 	 	150,772	 	 	 	150,772	 
	January 1, 2015
	 	 	150,773	 	 	 	301,545	 
	January 1, 2016
	 	 	150,773	 	 	 	452,318	 
	January 1, 2017
	 	 	150,773	 	 	 	603,091	 
	January 1, 2018
	 	 	150,773	 	 	 	753,864	 

(e) Vesting on Change in Control. Notwithstanding the provisions of subsection 2(d), in the
event that C. James Koch and/or members of his family cease to control a majority of the Company’s
issued and outstanding Class B Common Stock (a “Change in Control”), the Option shall become
immediately exercisable to the extent provided below.

 

 

 

If a Change in Control occurs while the Option remains in effect:

	 	 	 	 	 
	(i)

	 	Prior to January 1, 2011
	 	No accelerated vesting
	 
	 	 	 	 
	(ii)

	 	On or after January 1, 2011
but prior to January 1, 2014
	 	Vesting as to 200,000 Shares
	 
	 	 	 	 
	(iii)

	 	On or after January 1, 2014
but prior to January 1, 2015
	 	Vesting as to 50% of the Shares

remaining unvested
	 
	 	 	 	 
	(iv)

	 	On or after January 1, 2015
	 	Vesting as to all of the Shares

remaining unvested

3. Manner of Exercise of Option. To the extent exercisable, the Option may be exercised in
full at one time or in part from time to time, by giving written notice, signed by the person or
persons exercising the Option, to the Company, stating the number of Shares with respect to which
the Option is being exercised, accompanied by payment in full of the Exercise Price for such Shares
in cash. There shall be no exercise at any one time as to fewer than two thousand (2,000) Shares
or all of the remaining Shares then purchasable by the person or persons exercising the Option, if
fewer than two thousand (2,000) Shares.

4. Term of Option. The Option shall terminate on the first to occur of (i) the expiration of
twelve (12) months after Mr. Roper ceases to be an employee of the Company, regardless of the
reason therefore, (ii) the consummation of a Change in Control, subject to Mr. Roper’s right to
participate in the transaction giving rise to the Change in Control, to the extent exercisability
of the Option is accelerated pursuant to Section 2(e), (iii) the close of business on December 31,
2017 as to the 603,091 Shares theretofore vested and (iv) the close of business on December 31,
2018 as to the 150,773 Shares that vest on January 1, 2018.

5. Non-Transferability. The right of Mr. Roper to exercise the Option shall not be assignable
or transferable by Mr. Roper otherwise than by will or the laws of descent and distribution, and
the Option may be exercised during the lifetime of Mr. Roper only by him or her. The Option shall
be null and void and without effect upon the bankruptcy of Mr. Roper or upon any attempted
assignment or transfer, except as hereinabove provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or other disposition
contrary to the provisions hereof, or levy of execution, attachment, trustee process or similar
process, whether legal or equitable, upon the Option.

6. Restrictions on Issue of Shares.

(a) Notwithstanding the provisions of Section 3 hereof, the Company may delay the issuance of
Shares covered by the exercise of the Option until one of the following conditions shall be
satisfied:

(i) The Shares with respect to which the Option has been exercised are at the time of
the issuance of such Shares effectively registered under applicable federal and state
securities acts, as now in force or hereafter amended; or

(ii) Counsel for the Company shall have given an opinion, which opinion shall not be
unreasonably conditioned or withheld, that the issuance of such Shares is exempt from
registration under applicable federal and state securities acts, as now in force or
hereafter amended.

 

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(b) In the event that for any reason the Shares to be issued upon exercise of the Option shall
not be effectively registered under the Securities Act of 1933 (the “1933 Act”), upon any date on
which the Option is exercised in whole or in part, the Company shall be under no further obligation
to issue Shares covered by the Option, unless the person exercising the Option shall give a
written representation to the Company that such person is acquiring the Shares issued to him or her
pursuant to such exercise of the Option for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, and that he or she will make no transfer of
the same except in compliance with the 1933 Act and the rules and regulations promulgated
thereunder and then in force, and in such event, the Company may place an “investment legend”,
so-called, upon any certificate for the Shares which may be issued by reason of such exercise.

7. Adjustments Upon Changes in Capitalization. In the event that shares of the Company’s
Class A Common Stock are changed into or exchanged for a different number or kind of securities of
the Company or of another entity by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares or dividend payable in
capital stock or other securities, appropriate adjustment shall be made in the number and kind of
securities as to which the Option, or any part thereof then unexercised, shall be exercisable, to
the end that the proportionate interest of Mr. Roper shall remain as before the occurrence of such
event; such adjustment in the Option shall be made without change in the total price applicable to
the unexercised portion of the Option and with a corresponding adjustment in the Option price per
share or other security unit.

8. Compliance with Post-Employment Obligations. Mr. Roper understands and agrees that his
rights hereunder are conditioned on continued compliance with all of his obligations to the
Company, including obligations to protect the confidentiality of the Company’s proprietary
information and the proprietary information of any of the Company’s affiliates and not to compete
with the Company or any of its affiliates after Mr. Roper’s employment with the Company or any of
its affiliates has terminated. In furtherance of Mr. Roper’s understanding and agreement, Mr. Roper
further agrees that, if Mr. Roper breaches any post-employment confidentiality covenants or
covenants not to compete with the Company or any of its affiliates, the Company shall be entitled,
in addition to any other remedies it may then have available to it, to recover all profit realized
by Mr. Roper as a result of exercises of the Option during Mr. Roper ‘s last twelve (12) months of
employment with the Company or any of its affiliates or at any time following termination of such
employment.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and its corporate
seal to be hereto affixed by its officer thereunto duly authorized, and Mr. Roper has hereunto set
his hand and seal, all as of the day and year first above written.

	 	 	 	 	 
	 	THE BOSTON BEER COMPANY, INC.

 	 
	 	By:  	      /s/ WILLIAM F. URICH
 	 
	 	 	William F. Urich, Chief Financial Officer 	 
	 	 	 	 
	 
	 	 	 
	 	/s/ MARTIN F. ROPER
 	 
	 	Mr. Roper’s Signature 	 
	 	 	 
	 

 

-3-Filed by Bowne Pure Compliance

 

EXHIBIT 10.64

AMENDMENT TO CREDIT AGREEMENT

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is effective as of March 10,
2008 by and among THE BOSTON BEER COMPANY, INC. and BOSTON BEER CORPORATION (together, the
“Borrowers” and each individually, a “Borrower”); and BANK OF AMERICA, N.A., a
national banking association, successor-by-merger to Fleet National Bank (the “Bank”).

RECITALS

A. The Bank and the Borrowers are parties to that certain Second Amended and Restated Credit
Agreement dated as of July 1, 2002, as modified by letter agreements dated as of August 4, 2004,
December 30, 2005 and an Amendment to Credit Agreement dated as of February 27, 2007 (as modified,
the “Credit Agreement”). Capitalized terms used herein without definition have the
meanings assigned to them in the Credit Agreement.

B. The Borrowers have requested certain amendments to the Credit Agreement and the Bank is
willing to make such amendments, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto hereby agree as follows:

I. AMENDMENTS TO CREDIT AGREEMENT.

A. Extension of Expiration Date. Section 1.1 of the Credit Agreement is amended so
that the “Expiration Date”, as defined therein, shall be March 31, 2013 and the amount of the
“Commitment”, as defined therein, shall be $50,000,000.

B. Use of Proceeds. Section 1.11 of the Credit Agreement is amended to read in its
entirety as follows:

“1.11 Use of Proceeds. The proceeds of the Loans shall be
used for working capital, capital expenditures and general corporate
purposes of the Borrowers and their Subsidiaries (collectively, the
“Companies”) in accordance with the terms of the Agreement.”

C. Financial Covenants. Section 5.1 of the Credit Agreement is amended to read in its
entirety as follows:

“5.1 Covenants. Each of the Borrowers covenants and agrees
that, so long as the Bank has any commitment to lend hereunder or
any Loan or other Obligation to the Bank remains outstanding, the
Borrowers will on a consolidated basis:

(a) Maintain at all times Tangible Net Worth of not less than (i) $100,000,000, plus (ii) 50% of positive Net Income (with no reduction for losses) for each fiscal quarter ended on or after
December 31, 2007 plus (iii) 100% of Net Equity Proceeds received in
any fiscal quarter ending on or after September 30, 2007;

 

 

 

(b) Not permit at any time the ratio of EBITDA to Interest Expense
for any period of four consecutive fiscal quarters, commencing with
the period ending December 31, 2007, to be less than 2.00:1.00; and

(c) Not permit the ratio of Total Funded Debt at any time to EBITDA
for the most recently ended period of four consecutive fiscal
quarters to be greater than 3.50:1.00.”

D. Indebtedness. Section 6.1(c) of the Credit Agreement is amended to add thereto a
new section (f) to read as follows:

”; and (f) Indebtedness relating to rate hedging and swap transactions of the
Borrowers and their Subsidiaries entered into in the ordinary course of business.”

E. Distributions. Subsection (c) of Section 6.7(c) of the Credit Agreement is amended
to read in its entirety as follows:

"(c) The Holding Company may redeem additional shares of its Class A Common
Stock (i) as approved by its Board of Directors between January 4, 2000 and February
20, 2002 (collectively, the “Phase 1 Stock Repurchases”) or (ii) as approved
by its Board of Directors at any time after the date hereof (collectively, the
“Phase 2 Stock Repurchases”) and the Holding Company may declare or pay cash
dividends to its Class A Common and Class B Common stockholders; provided no Event
of Default exists before and after giving effect to the payment of such dividends or
redemption.”

F. Definitions. The definition of “Permitted Investments” set forth in Schedule
A to the Credit Agreement is amended to read in its entirety as follows:

“Permitted Investments — As applied to any Company, (i) investments of
funds in authorized marketable securities in conformance with the investment policy
and investment objectives as adopted by the Board of Directors of the Holding
Company from time to time (with a copy thereof being delivered to Bank promptly
after such adoption), (ii) up to $7,500,000 in the aggregate in connection with
Permitted Acquisitions after the date of this Agreement, (iii) the investments of
the Holding Company and its Subsidiaries in their wholly-owned direct and indirect
Subsidiaries, and (iv) advances to employees for the purchase of stock options not
to exceed $1,000,000 outstanding at any time in the case of any one employee and not
to exceed $2,000,000 outstanding at any time in the aggregate to all employees of
the Companies.”

 

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G. Further Amendments. Except as specifically amended above, the text of the Credit
Agreement shall remain unmodified and in full force and effect and is hereby ratified and affirmed
in all respects.

II. MISCELLANEOUS.

A. The Bank acknowledges that Boston Beer Corporation has entered into a Contract of Sale
dated August 1, 2007 with Diageo North America, Inc. (“Diageo”) to acquire the brewery
facility, including all real and personal property, owned by Diageo located in Breinigsville,
Pennsylvania, for a purchase price of $55,000,000. The Borrowers have informed the Bank that they
intend to distribute sufficient funds to Samuel Adams Pennsylvania Brewery Company, a wholly-owned
subsidiary of Boston Beer Corporation (“SAPBC”), to acquire such facility, to make capital
improvements to such facility and to operate the facility (the “Lehigh Acquisition, Improvement
and Operation”). Upon such acquisition, SAPBC will become a Material Subsidiary under the
terms of the Credit Agreement. To the extent such consent is necessary, the Bank hereby consents
to the Lehigh Acquisition, Improvement and Operation and confirms that, any implication in the
Credit Agreement to the contrary notwithstanding, the Lehigh Acquisition, Improvement and Operation
are not subject to the dollar limits contained in the definitions of Permitted Acquisitions or
Permitted Investments contained in the Credit Agreement.

B. The Borrowers hereby represent and warrant that (a) all of the Borrowers’ representations
and warranties contained in Section 3 of the Credit Agreement are true and correct in all material
respects as of the date hereof (except for representations and warranties made as of a specified
date, which shall be true and correct as of such date) and (b) no Default has occurred and is
continuing. Attached as Annex 1 hereto is a true and complete list of Material
Subsidiaries of the Borrowers as of the date of this Amendment.

C. The Borrowers have informed the Bank that Freetown Acquisition Company, LLC, a
Massachusetts limited liability company and wholly-owned Subsidiary of Boston Beer Corporation
purchased real estate in Freetown, Massachusetts and desires to sell such real estate on an
arms-length basis and distribute the net proceeds of such sale to its parent, Boston Beer
Corporation. To the extent such consent is necessary, the Bank hereby consents to such sale and
distribution of net proceeds thereof to Boston Beer Corporation.

D. This Amendment shall be governed by and construed in accordance with the internal laws of
the Commonwealth of Massachusetts.

E. The Borrowers agree to pay to the Bank upon execution and delivery of this Amendment, an
amendment fee in the amount of 0.10% of the Commitment ($50,000) and reasonable legal fees and
expenses of counsel to Bank in connection with the preparation, negotiation and delivery of this
Amendment.

F. This Amendment may be executed by the parties hereto in several counterparts hereof and by
the different parties hereto on separate counterparts hereof, all of which counterparts shall
together constitute one and the same agreement. Delivery of an executed signature page of this
Amendment by facsimile transmission shall be effective as an in-hand delivery of an original
executed counterpart hereof.

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed under seal by their
duly authorized officers under seal as of the day and year first above written.

	 	 	 	 	 
	 	THE BOSTON BEER COMPANY, INC.

 	 
	 	By:  	/s/ MARTIN F. ROPER
 	 
	 	 	Name:  	Martin F. Roper 	 
	 	 	Title:  	President & CEO 	 
	 
	 	BOSTON BEER CORPORATION

 	 
	 	By:  	/s/ MARTIN F. ROPER
 	 
	 	 	Name:  	Martin F. Roper 	 
	 	 	Title:  	President & CEO 	 
	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ CHRISTOPHER S. ALLEN
 	 
	 	 	Name:  	Christopher S. Allen 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

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ANNEX 1

Material Subsidiaries as of March 10, 2008

Samuel Adams Brewery Company, Ltd., an Ohio limited liability company

BBC Brands, LLC, a Massachusetts limited liability company

Samuel Adams Pennsylvania Brewery Company,

a Pennsylvania limited liability company

(expected to become Material Subsidiary in near future)

 

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CONFIRMATION OF GUARANTORS

By signing below, the undersigned Material Subsidiaries of The Boston Beer Company, Inc. and
Boston Beer Corporation hereby acknowledge and consent to the foregoing Amendment and all prior
amendments to the Credit Agreement (as defined in the foregoing Amendment) and confirm that their
respective Unlimited Guarantees are in full force and effect and continue to guarantee payment and
performance of any and all Obligations (as defined in such Unlimited Guarantees) of the Borrowers
to Bank, including without limitation the Note as amended and restated to reflect the increased
Commitment of $50,000,000.

Dated as of March 10, 2008.

	 	 	 	 	 
	 	SAMUEL ADAMS BREWERY COMPANY, LTD.

 	 
	 	By:  	/s/ MARTIN F. ROPER
 	 
	 	 	Name:  	Martin F. Roper 	 
	 	 	Title:  	President & CEO 	 
	 
	 	BBC BRANDS, LLC

 	 
	 	By:  	                       /s/ MARTIN F. ROPER
 	 
	 	 	Name:  	Martin F. Roper 	 
	 	 	Title:  	President & CEO 	 
	 

 

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