Document:

exv10w1

 

    EXHIBIT
10.1

 

    NUANCE
    COMMUNICATIONS, INC.

    (FORMERLY KNOWN AS SCANSOFT, INC.)

 

    2000
    STOCK PLAN

    (As proposed to be amended at the 2007 Annual Meeting of
    Stockholders)

 

    1. Purposes of the Plan.  The purposes of
    this Plan are:

 

			
	 	    • 
	
    to attract and retain the best available personnel for positions
    of substantial responsibility,

	 
	 	    • 
	
    to provide additional incentive to Employees, Directors and
    Consultants, and

	 
	 	    • 
	
    to promote the success of the Company’s business.

 

    The Plan permits the grant of Incentive Stock Options,
    Nonstatutory Stock Options, Stock Purchase Rights, Stock
    Appreciation Rights, and Restricted Stock Units.

 

    2. Definitions.  As used herein, the
    following definitions shall apply:

 

    (a) “Administrator” means the Board or any
    of its Committees as shall be administering the Plan, in
    accordance with Section 4 of the Plan.

 

    (b) “Affiliated SAR” means an SAR that is
    granted in connection with a related Option, and which
    automatically will be deemed to be exercised at the same time
    that the related Option is exercised.

 

    (c) “Applicable Laws” means the
    requirements relating to the administration of equity-based
    awards under U.S. state corporate laws, U.S. federal
    and state securities laws, the Code, any stock exchange or
    quotation system on which the Common Stock is listed or quoted
    and the applicable laws of any foreign country or jurisdiction
    where Awards are, or will be, granted under the Plan.

 

    (d) “Annual Revenue” means the
    Company’s or a business unit’s net sales for the
    Fiscal Year, determined in accordance with generally accepted
    accounting principles; provided, however, that prior to the
    Fiscal Year, the Committee shall determine whether any
    significant item(s) shall be excluded or included from the
    calculation of Annual Revenue with respect to one or more
    Participants.

 

    (e) “Award” means, individually or
    collectively, a grant under the Plan of Options, Stock Purchase
    Rights, Stock Appreciation Rights, and Restricted Stock Units.

 

    (f) “Award Agreement” means the written or
    electronic agreement setting forth the terms and provisions
    applicable to each Award granted under the Plan. The Award
    Agreement is subject to the terms and conditions of the Plan.

 

    (g) “Board” means the Board of Directors
    of the Company.

 

    (h) “Cash Position” means the
    Company’s level of cash and cash equivalents.

 

    (i) “Code” means the Internal Revenue Code
    of 1986, as amended. Any reference to a section of the Code
    herein will be a reference to any successor or amended section
    of the Code.

 

    (j) “Committee” means a committee of
    Directors appointed by the Board in accordance with
    Section 4 of the Plan.

 

    (k) “Common Stock” means the common stock
    of the Company.

 

    (l) “Company” means Nuance Communications,
    Inc. (formerly known as ScanSoft, Inc.) a Delaware corporation.
    With respect to the definitions of the Performance Goals, the
    Committee may determine that “Company” means Nuance
    Communications, Inc. and its consolidated subsidiaries.

 

    (m) “Consultant” means any person,
    including an advisor, engaged by the Company or a Parent or
    Subsidiary to render services to such entity.

    

1

 

 

    (n) “Controllable Profits” means as to any
    Plan Year, a business unit’s Annual Revenue minus
    (a) cost of sales, (b) research, development, and
    engineering expense, (c) marketing and sales expense,
    (d) general and administrative expense, (e) extended
    receivables expense, and (f) shipping requirement deviation
    expense.

 

    (o) “Customer Satisfaction MBOs” means as
    to any Participant for any Plan Year, the objective and
    measurable individual goals set by a “management by
    objectives” process and approved by the Committee, which
    goals relate to the satisfaction of external or internal
    customer requirements(p) .

 

    (p) “Director” means a member of the Board.

 

    (q) “Disability” means total and permanent
    disability as defined in Section 22(e)(3) of the Code.

 

    (r) “Earnings Per Share” means as to any
    Fiscal Year, the Company’s or a business unit’s Net
    Income, divided by a weighted average number of common shares
    outstanding and dilutive common equivalent shares deemed
    outstanding, determined in accordance with generally accepted
    accounting principles.

 

    (s) “Employee” means any person, including
    Officers and Directors, employed by the Company or any Parent or
    Subsidiary of the Company. Neither service as a Director nor
    payment of a director’s fee by the Company shall be
    sufficient to constitute “employment” by the Company.

 

    (t) “Exchange Act” means the Securities
    Exchange Act of 1934, as amended.

 

    (u) “Fair Market Value” means, as of any
    date, the value of Common Stock determined as follows:

 

    (i) If the Common Stock is listed on any established stock
    exchange or a national market system, including without
    limitation the Nasdaq National Market or The Nasdaq SmallCap
    Market of The Nasdaq Stock Market, its Fair Market Value shall
    be the closing sales price for such stock (or the closing bid,
    if no sales were reported) as quoted on such exchange or system
    on the day of determination, as reported in The Wall Street
    Journal or such other source as the Administrator deems
    reliable;

 

    (ii) If the Common Stock is regularly quoted by a
    recognized securities dealer but selling prices are not
    reported, the Fair Market Value of a Share of Common Stock shall
    be the mean between the high bid and low asked prices for the
    Common Stock on the last market trading day on the day of
    determination, as reported in The Wall Street Journal or
    such other source as the Administrator deems reliable; or

 

    (iii) In the absence of an established market for the
    Common Stock, the Fair Market Value shall be determined in good
    faith by the Administrator.

 

    (v) “Fiscal Year” means the fiscal year of
    the Company.

 

    (w) “Freestanding SAR” means an SAR that
    is granted independent of any Option.

 

    (x) “Incentive Stock Option” means an
    Option intended to qualify as an incentive stock option within
    the meaning of Section 422 of the Code and the regulations
    promulgated thereunder.

 

    (y) “Individual Objectives” means as to a
    Participant, the objective and measurable goals set by a
    “management by objectives” process and approved by the
    Committee (in its discretion).

 

    (z) “Net Income” means as to any Fiscal
    Year, the income after taxes of the Company for the Fiscal Year
    determined in accordance with generally accepted accounting
    principles, provided that prior to the Fiscal Year, the
    Committee shall determine whether any significant item(s) shall
    be included or excluded from the calculation of Net Income with
    respect to one or more Participants.

 

    (aa) “New Orders” means as to any Plan
    Year, the firm orders for a system, product, part, or service
    that are being recorded for the first time as defined in the
    Company’s order Recognition Policy.

 

    (bb) “Nonstatutory Stock Option” means an
    Option that by its terms does not qualify or is not intended to
    qualify as an Incentive Stock Option.

 

    (cc) “Officer” means a person who is an
    officer of the Company within the meaning of Section 16 of
    the Exchange Act and the rules and regulations promulgated
    thereunder.

    

2

 

 

    (dd) “Operating Cash Flow” means the
    Company’s or a business unit’s sum of Net Income plus
    depreciation and amortization less capital expenditures plus
    changes in working capital comprised of accounts receivable,
    inventories, other current assets, trade accounts payable,
    accrued expenses, product warranty, advance payments from
    customers and long-term accrued expenses, determined in
    accordance with generally acceptable accounting principles.

 

    (ee) “Operating Income” means the
    Company’s or a business unit’s income from operations
    but excluding any unusual items, determined in accordance with
    generally accepted accounting principles.

 

    (ff) “Option” means a stock option granted
    pursuant to the Plan.

 

    (gg) “Optionee” means the holder of an
    outstanding Option or Stock Purchase Right granted under the
    Plan.

 

    (hh) “Optioned Stock” means the Shares
    subject to an Award.

 

    (ii) “Parent” means a “parent
    corporation,” whether now or hereafter existing, as defined
    in Section 424(e) of the Code.

 

    (jj) “Participant” means the holder of an
    outstanding Award, which shall include an Optionee.

 

    (kk) “Performance Goals” means the goal(s)
    (or combined goal(s)) determined by the Committee (in its
    discretion) to be applicable to a Participant with respect to an
    Award. As determined by the Committee, the Performance Goals
    applicable to an Award may provide for a targeted level or
    levels of achievement using one or more of the following
    measures: (a) Annual Revenue, (b) Cash Position,
    (c) Controllable Profits, (d) Customer Satisfaction
    MBOs, (e) Earnings Per Share, (f) Individual
    Objectives, (g) Net Income, (h) New Orders,
    (i) Operating Cash Flow, (j) Operating Income,
    (k) Return on Assets, (l) Return on Equity,
    (m) Return on Sales, and (n) Total Shareholder Return.
    The Performance Goals may differ from Participant to Participant
    and from Award to Award.

 

    (ll) “Plan” means this 2000 Stock Plan, as
    amended and restated.

 

    (mm) “Restricted Stock” means Shares
    acquired pursuant to a grant of Stock Purchase Rights under
    Section 9 of the Plan or pursuant to the early exercise of
    an Option.

 

    (nn) “Restricted Stock Purchase Agreement”
    means a written agreement between the Company and the
    Participant evidencing the terms and restrictions applying to
    stock purchased under a Stock Purchase Right. The Restricted
    Stock Purchase Agreement is subject to the terms and conditions
    of the Plan and the Notice of Grant.

 

    (oo) “Restricted Stock Unit” means an
    Award granted to a Participant pursuant to Section 11.

 

    (pp) “Return on Assets” means the
    percentage equal to the Company’s or a business unit’s
    Operating Income before incentive compensation, divided by
    average net Company or business unit, as applicable, assets,
    determined in accordance with generally accepted accounting
    principles.

 

    (qq) “Return on Equity” means the
    percentage equal to the Company’s Net Income divided by
    average stockholder’s equity, determined in accordance with
    generally accepted accounting principles.

 

    (rr) “Return on Sales” means the
    percentage equal to the Company’s or a business unit’s
    Operating Income before incentive compensation, divided by the
    Company’s or the business unit’s, as applicable,
    revenue, determined in accordance with generally accepted
    accounting principles.

 

    (ss) “Rule 16b-3”
    means
    Rule 16b-3
    of the Exchange Act or any successor to
    Rule 16b-3,
    as in effect when discretion is being exercised with respect to
    the Plan.

 

    (tt) “Section 16(b)” means
    Section 16(b) of the Exchange Act.

 

    (uu) “Service Provider” means an Employee,
    Director or Consultant.

 

    (vv) “Share” means a share of the Common
    Stock, as adjusted in accordance with Section 14 of the
    Plan.

    

3

 

 

    (ww) “Stock Appreciation Right” or
    “SAR” means an Award, granted alone or in
    connection with an Option, which pursuant to Section 10 is
    designated as an SAR.

 

    (xx) “Stock Purchase Right” means the
    right to purchase Shares pursuant to Section 9 of the Plan.

 

    (yy) “Subsidiary” means a “subsidiary
    corporation”, whether now or hereafter existing, as defined
    in Section 424(f) of the Code.

 

    (zz) “Tandem SAR” means an SAR that is
    granted in connection with a related Option, the exercise of
    which will require forfeiture of the right to purchase an equal
    number of Shares under the related Option (and when a Share is
    purchased under the Option, the SAR will be canceled to the same
    extent).

 

    (aaa) “Total Shareholder Return” means the
    total return (change in share price plus reinvestment of any
    dividends) of a Share.

 

    3. Stock Subject to the Plan.  Subject to
    the provisions of Section 14 of the Plan, the maximum
    aggregate number of Shares that may be issued under the Plan is
    20,050,000 Shares (the “Plan Maximum”). If
    any outstanding Award for any reason expires or is terminated or
    canceled without having been exercised or settled in full, or if
    Shares acquired pursuant to an Award subject to forfeiture or
    repurchase are forfeited or repurchased by the Company, the
    Shares allocable to the terminated portion of such Award or such
    forfeited or repurchased Shares shall again be available for
    grant under the Plan. Shares shall not be deemed to have been
    granted pursuant to the Plan (a) with respect to any
    portion of an Award that is settled in cash or (b) to the
    extent such Shares are withheld in satisfaction of tax
    withholding obligations. Upon payment in Shares pursuant to the
    exercise of a Stock Appreciation Right, the number of Shares
    available for grant under the Plan shall be reduced only by the
    number of Shares actually issued in such payment. If the
    exercise price of an Option is paid by tender to the Company of
    Shares underlying the Option, the number of Shares available for
    grant under the Plan shall be reduced by the net number of
    Shares for which the Option is exercised. The Shares may be
    authorized, but unissued, or reacquired Common Stock.

 

    4. Administration of the Plan.

 

    (a) Procedure.

 

    (i) Multiple Administrative
    Bodies.  Different Committees with respect to
    different groups of Service Providers may administer the Plan.

 

    (ii) Section 162(m).  To the extent
    that the Administrator determines it to be desirable to qualify
    Awards granted hereunder as “performance-based
    compensation” within the meaning of Section 162(m) of
    the Code, the Plan shall be administered by a Committee of two
    or more “outside directors” within the meaning of
    Section 162(m) of the Code. For purposes of qualifying
    grants of Awards as “performance-based compensation”
    under Section 162(m) of the Code, the Committee, in its
    discretion, may set restrictions based upon the achievement of
    Performance Goals. The Performance Goals shall be set by the
    Committee on or before the latest date permissible to enable the
    Awards to qualify as “performance-based compensation”
    under Section 162(m) of the Code. In granting Awards which
    are intended to qualify under Section 162(m) of the Code,
    the Committee shall follow any procedures determined by it from
    time to time to be necessary or appropriate to ensure
    qualification of the Awards under Section 162(m) of the
    Code (e.g., in determining the Performance Goals).

 

    (iii) Rule 16b-3.  To
    the extent desirable to qualify transactions hereunder as exempt
    under
    Rule 16b-3,
    the transactions contemplated hereunder shall be structured to
    satisfy the requirements for exemption under
    Rule 16b-3.

 

    (iv) Other Administration.  Other than as
    provided above, the Plan shall be administered by (A) the
    Board or (B) a Committee, which committee shall be
    constituted to satisfy Applicable Laws.

    

4

 

 

    (b) Powers of the Administrator.  Subject
    to the provisions of the Plan, and in the case of a Committee,
    subject to the specific duties delegated by the Board to such
    Committee, the Administrator shall have the authority, in its
    discretion:

 

    (i) to determine the Fair Market Value;

 

    (ii) to select the Service Providers to whom Awards may be
    granted hereunder;

 

    (iii) to determine the number of Shares to be covered by
    each Award granted hereunder;

 

    (iv) to approve forms of agreement for use under the Plan;

 

    (v) to determine the terms and conditions, not inconsistent
    with the terms of the Plan, of any Award granted hereunder. Such
    terms and conditions include, but are not limited to, the
    exercise price, the time or times when Awards may be exercised
    (which may be based on performance criteria), any vesting
    acceleration or waiver of forfeiture restrictions in connection
    with the termination of a Participant’s status as a Service
    Provider, and any restriction or limitation regarding any Award
    or the Shares relating thereto, based in each case on such
    factors as the Administrator, in its sole discretion, shall
    determine;

 

    (vi) to construe and interpret the terms of the Plan and
    awards granted pursuant to the Plan;

 

    (vii) to prescribe, amend and rescind rules and regulations
    relating to the Plan, including rules and regulations relating
    to sub-plans
    established for the purpose of qualifying for preferred tax
    treatment under foreign tax laws;

 

    (viii) to modify or amend each Award (subject to
    Section 17(c) of the Plan), including the discretionary
    authority to extend the post-termination exercisability period
    of Awards longer than is otherwise provided for in the Plan;

 

    (ix) to allow Participants to satisfy withholding tax
    obligations by electing to have the Company withhold from the
    Shares to be issued upon exercise of an Award that number of
    Shares having a Fair Market Value equal to the minimum amount
    required to be withheld. The Fair Market Value of the Shares to
    be withheld shall be determined on the date that the amount of
    tax to be withheld is to be determined. All elections by a
    Participant to have Shares withheld for this purpose shall be
    made in such form and under such conditions as the Administrator
    may deem necessary or advisable;

 

    (x) to authorize any person to execute on behalf of the
    Company any instrument required to effect the grant of an Award
    previously granted by the Administrator;

 

    (xi) to allow a Participant to defer the receipt of payment
    of cash or the delivery of Shares that would otherwise be due to
    such Participant under an Award; or

 

    (xii) to make all other determinations deemed necessary or
    advisable for administering the Plan.

 

    (c) Effect of Administrator’s
    Decision.  The Administrator’s decisions,
    determinations and interpretations shall be final and binding on
    all Participants and any other holders of Awards.

 

    5. Eligibility.  Nonstatutory Stock
    Options, Stock Purchase Rights, Stock Appreciation Rights, and
    Restricted Stock Units may be granted to Service Providers.
    Incentive Stock Options may be granted only to Employees.

 

    6. Limitations.

 

    (a) Each Option shall be designated in the Award Agreement
    as either an Incentive Stock Option or a Nonstatutory Stock
    Option. However, notwithstanding such designation, to the extent
    that the aggregate Fair Market Value of the Shares with respect
    to which Incentive Stock Options are exercisable for the first
    time by the Participant during any calendar year (under all
    plans of the Company and any Parent or Subsidiary) exceeds
    $100,000, such Options shall be treated as Nonstatutory Stock
    Options. For purposes of this Section 6(a), Incentive Stock
    Options shall be taken into account in the order in which they
    were granted. The Fair Market Value of the Shares shall be
    determined as of the time the Option with respect to such Shares
    is granted.

    

5

 

 

    (b) The following limitations shall apply to grants of
    Options and Stock Appreciation Rights:

 

    (i) No Service Provider shall be granted, in any Fiscal
    Year, Options or Stock Appreciation Rights covering more than
    1,000,000 Shares.

 

    (ii) In connection with his or her initial service, a
    Service Provider may be granted Options or Stock Appreciation
    Rights covering up to an additional 1,000,000 Shares, which
    shall not count against the limit set forth in
    subsection (i) above.

 

    (iii) The foregoing limitations shall be adjusted
    proportionately in connection with any change in the
    Company’s capitalization as described in Section 14.

 

    (iv) If an Option or Stock Appreciation Right is cancelled
    in the same fiscal year of the Company in which it was granted
    (other than in connection with a transaction described in
    Section 14), the cancelled Option or Stock Appreciation
    Right will be counted against the limits set forth in
    subsections (i) and (ii) above. For this purpose, if
    the exercise price of an Option or Stock Appreciation Right is
    reduced, the transaction will be treated as a cancellation of
    the Option or Stock Appreciation Right and the grant of a new
    Option or Stock Appreciation Right.

 

    (c) The exercise price of any Option or SAR outstanding or
    to be granted in the future under the Plan shall not be reduced
    or cancelled and re-granted at a lower exercise price (including
    pursuant to any “6 month and 1 day”
    cancellation and re-grant scheme), regardless of whether or not
    the Shares subject to the cancelled Options or SARs are put back
    into the available pool for grant. In addition, the
    Administrator shall not replace underwater Options or SARs with
    restricted stock in an exchange, buy-back or other scheme.
    Moreover, the Administrator shall not replace any Options or
    SARs with new options or stock appreciation rights having a
    lower exercise price or accelerated vesting schedule in an
    exchange, buy-back or other scheme.

 

    7. Term of Plan.  Subject to
    Section 20 of the Plan, the Plan shall become effective
    upon its adoption by the Board. It shall continue in effect for
    a term of ten (10) years unless terminated earlier under
    Section 17 of the Plan.

 

    8. Stock Options

 

    (a) Term of Option.  The term of each
    Option shall be stated in the Award Agreement, but in no event
    shall the term of an Option be more than seven (7) years
    from the date of grant. Moreover, in the case of an Incentive
    Stock Option granted to a Participant who, at the time the
    Incentive Stock Option is granted, owns stock representing more
    than ten percent (10%) of the total combined voting power of all
    classes of stock of the Company or any Parent or Subsidiary, the
    term of the Incentive Stock Option shall be five (5) years
    from the date of grant or such shorter term as may be provided
    in the Award Agreement.

 

    (b) Option Exercise Price and Consideration.

 

    (i) Exercise Price.  The per Share
    exercise price for the Shares to be issued pursuant to the
    exercise of an Option shall be no less than 100% of the Fair
    Market Value per Share on the date of grant. In the case of an
    Incentive Stock Option granted to an Employee who, at the time
    the Incentive Stock Option is granted, owns stock representing
    more than ten percent (10%) of the voting power of all classes
    of stock of the Company or any Parent or Subsidiary, the per
    Share exercise price shall be no less than 110% of the Fair
    Market Value per Share on the date of grant.

 

    (ii) Waiting Period and Exercise
    Dates.  At the time an Option is granted, the
    Administrator shall fix the period within which the Option may
    be exercised and shall determine any conditions that must be
    satisfied before the Option may be exercised.

 

    (iii) Form of Consideration.  The
    Administrator shall determine the acceptable form of
    consideration for exercising an Option, including the method of
    payment. In the case of an Incentive Stock Option, the
    Administrator shall determine the acceptable form of
    consideration at the time of grant. Such consideration may
    consist entirely of:

 

    (1) cash;

 

    (2) check;

    

6

 

 

    (3) other Shares which (A) in the case of Shares
    acquired upon exercise of an option, have been owned by the
    Participant for more than six months on the date of surrender,
    and (B) have a Fair Market Value on the date of surrender
    equal to the aggregate exercise price of the Shares as to which
    said Option shall be exercised;

 

    (4) consideration received by the Company under a cashless
    exercise program implemented by the Company in connection with
    the Plan;

 

    (5) a reduction in the amount of any Company liability to
    the Participant, including any liability attributable to the
    Participant’s participation in any Company-sponsored
    deferred compensation program or arrangement;

 

    (6) any combination of the foregoing methods of payment; or

 

    (7) such other consideration and method of payment for the
    issuance of Shares to the extent permitted by Applicable Laws.

 

    (c) Exercise of Option.

 

    (i) Procedure for Exercise; Rights as a
    Stockholder.  Any Option granted hereunder shall
    be exercisable according to the terms of the Plan and at such
    times and under such conditions as determined by the
    Administrator and set forth in the Award Agreement. An Option
    may not be exercised for a fraction of a Share.

 

    (1) An Option shall be deemed exercised when the Company
    receives: (i) written or electronic notice of exercise (in
    such form as the Administrator may specify from time to time)
    from the person entitled to exercise the Option, and
    (ii) full payment for the Shares with respect to which the
    Option is exercised (together with any applicable withholding
    taxes). Full payment may consist of any consideration and method
    of payment authorized by the Administrator and permitted by the
    Award Agreement and the Plan. Shares issued upon exercise of an
    Option shall be issued in the name of the Participant or, if
    requested by the Participant, in the name of the Participant and
    his or her spouse. Until the Shares are issued (as evidenced by
    the appropriate entry on the books of the Company or of a duly
    authorized transfer agent of the Company), no right to vote or
    receive dividends or any other rights as a stockholder shall
    exist with respect to the Optioned Stock, notwithstanding the
    exercise of the Option. The Company shall issue (or cause to be
    issued) such Shares promptly after the Option is exercised. No
    adjustment will be made for a dividend or other right for which
    the record date is prior to the date the Shares are issued,
    except as provided in Section 14 of the Plan.

 

    (2) Exercising an Option in any manner shall decrease the
    number of Shares thereafter available, both for purposes of the
    Plan and for sale under the Option, by the number of Shares as
    to which the Option is exercised.

 

    (ii) Termination of Relationship as a Service
    Provider.  If a Participant ceases to be a Service
    Provider, other than upon the Participant’s death or
    Disability, the Participant may exercise his or her Option
    within such period of time as is specified in the Award
    Agreement to the extent that the Option is vested on the date of
    termination (but in no event later than the expiration of the
    term of such Option as set forth in the Award Agreement). In the
    absence of a specified time in the Award Agreement, the Option
    shall remain exercisable for three (3) months following the
    Participant’s termination. If, on the date of termination,
    the Participant is not vested as to his or her entire Option,
    the Shares covered by the unvested portion of the Option shall
    revert to the Plan. If, after termination, the Participant does
    not exercise his or her Option within the time specified by the
    Administrator, the Option shall terminate, and the Shares
    covered by such Option shall revert to the Plan.

 

    (iii) Disability of Participant.  If a
    Participant ceases to be a Service Provider as a result of the
    Participant’s Disability, the Participant may exercise his
    or her Option within such period of time as is specified in the
    Award Agreement to the extent the Option is vested on the date
    of termination (but in no event later than the expiration of the
    term of such Option as set forth in the Award Agreement). In the
    absence of a specified time in the Award Agreement, the Option
    shall remain exercisable for twelve (12) months following
    the Participant’s termination. If, on the date of
    termination, the Participant is not vested as to his or her
    entire Option, the Shares covered by the unvested portion of the
    Option shall revert to the Plan. If, after termination,

    

7

 

    the Participant does not exercise his or her Option within the
    time specified herein, the Option shall terminate, and the
    Shares covered by such Option shall revert to the Plan.

 

    (iv) Death of Participant.  If a
    Participant dies while a Service Provider, the Option may be
    exercised following the Participant’s death within such
    period of time as is specified in the Award Agreement (but in no
    event may the Option be exercised later than the expiration of
    the term of such Option as set forth in the Award Agreement), by
    the Participant’s estate or by a person who acquires the
    right to exercise the Option by bequest or inheritance, but only
    to the extent that the Option is vested on the date of death. In
    the absence of a specified time in the Award Agreement, the
    Option shall remain exercisable for twelve (12) months
    following the Participant’s termination. If, at the time of
    death, the Participant is not vested as to his or her entire
    Option, the Shares covered by the unvested portion of the Option
    shall immediately revert to the Plan. The Option may be
    exercised by the executor or administrator of the
    Participant’s estate or, if none, by the person(s) entitled
    to exercise the Option under the Participant’s will or the
    laws of descent or distribution. If the Option is not so
    exercised within the time specified herein, the Option shall
    terminate, and the Shares covered by such Option shall revert to
    the Plan.

 

    (v) Buyout Provisions.  The Administrator
    may at any time offer to buy out for a payment in cash or Shares
    an Option previously granted based on such terms and conditions
    as the Administrator shall establish and communicate to the
    Participant at the time that such offer is made.

 

    9. Stock Purchase Rights.

 

    (a) Rights to Purchase.  Stock Purchase
    Rights may be issued either alone, in addition to, or in tandem
    with other Awards granted under the Plan
    and/or cash
    awards made outside of the Plan. After the Administrator
    determines that it will offer Stock Purchase Rights under the
    Plan, it shall advise the offeree in writing or electronically,
    of the terms, conditions and restrictions related to the offer,
    including the number of Shares that the offeree shall be
    entitled to purchase (subject to the limits set forth in
    Section 3), the price to be paid, and the time within which
    the offeree must accept such offer. The offer shall be accepted
    by execution of a Restricted Stock Purchase Agreement in the
    form determined by the Administrator. The following limitations
    shall apply to grants of Stock Purchase Rights:

 

    (i) No Service Provider shall be granted, in any Fiscal
    Year, Stock Purchase Rights covering more than
    750,000 Shares.

 

    (ii) The foregoing limitation shall be adjusted
    proportionately in connection with any change in the
    Company’s capitalization as described in Section 14.

 

    (iii) If a Stock Purchase Right is cancelled in the same
    fiscal year of the Company in which it was granted (other than
    in connection with a transaction described in Section 14),
    the cancelled Stock Purchase Right will be counted against the
    limit set forth in subsection (i) above.

 

    (b) Repurchase Option.  Unless the
    Administrator determines otherwise, the Restricted Stock
    Purchase Agreement shall grant the Company a repurchase option
    exercisable upon the voluntary or involuntary termination of the
    purchaser’s service with the Company for any reason
    (including death or Disability). The purchase price for Shares
    repurchased pursuant to the Restricted Stock Purchase Agreement
    shall be the original price paid by the purchaser and may be
    paid by cancellation of any indebtedness of the purchaser to the
    Company. The repurchase option shall lapse at a rate determined
    by the Administrator.

 

    (c) Other Provisions.  The Restricted
    Stock Purchase Agreement shall contain such other terms,
    provisions and conditions not inconsistent with the Plan as may
    be determined by the Administrator in its sole discretion.

 

    (d) Rights as a Stockholder.  Once the
    Stock Purchase Right is exercised, the purchaser shall have the
    rights equivalent to those of a stockholder, and shall be a
    stockholder when his or her purchase is entered upon the records
    of the duly authorized transfer agent of the Company. No
    adjustment will be made for a dividend or other right for which
    the record date is prior to the date the Stock Purchase Right is
    exercised, except as provided in Section 14 of the Plan.

    

8

 

 

    10. Stock Appreciation Rights

 

    (a) Grant of SARs.  Subject to the terms
    and conditions of the Plan, an SAR may be granted to Service
    Providers at any time and from time to time as will be
    determined by the Administrator, in its sole discretion. The
    Administrator may grant Affiliated SARs, Freestanding SARs,
    Tandem SARs, or any combination thereof.

 

    (b) Number of Shares.  The Administrator
    will have complete discretion to determine the number of SARs
    granted to any Service Provider.

 

    (c) Exercise Price and Other Terms.  The
    Administrator, subject to the provisions of the Plan, will
    determine the terms and conditions of SARs granted under the
    Plan; provided, that, the exercise price of an SAR is at least
    100% of the Fair Market Value of the Shares subject to the SAR;
    provided, further, the exercise price of Tandem or Affiliated
    SARs will equal the exercise price of the related Option.

 

    (d) Exercise of Tandem SARs.  Tandem SARs
    may be exercised for all or part of the Shares subject to the
    related Option upon the surrender of the right to exercise the
    equivalent portion of the related Option. A Tandem SAR may be
    exercised only with respect to the Shares for which its related
    Option is then exercisable. With respect to a Tandem SAR granted
    in connection with an Incentive Stock Option: (i) the
    Tandem SAR will expire no later than the expiration of the
    underlying Incentive Stock Option; (ii) the value of the
    payout with respect to the Tandem SAR will be for no more than
    one hundred percent (100%) of the difference between the
    exercise price of the underlying Incentive Stock Option and the
    Fair Market Value of the Shares subject to the underlying
    Incentive Stock Option at the time the Tandem SAR is exercised;
    and (iii) the Tandem SAR will be exercisable only when the
    Fair Market Value of the Shares subject to the Incentive Stock
    Option exceeds the Exercise Price of the Incentive Stock Option.

 

    (e) Exercise of Affiliated SARs.  An
    Affiliated SAR will be deemed to be exercised upon the exercise
    of the related Option. The deemed exercise of an Affiliated SAR
    will not necessitate a reduction in the number of Shares subject
    to the related Option.

 

    (f) Exercise of Freestanding
    SARs.  Freestanding SARs will be exercisable on
    such terms and conditions as the Administrator, in its sole
    discretion, will determine.

 

    (g) SAR Agreement.  Each SAR grant will be
    evidenced by an Award Agreement that will specify the exercise
    price, the term of the SAR, the conditions of exercise, and such
    other terms and conditions as the Administrator, in its sole
    discretion, will determine.

 

    (h) Expiration of SARs.  An SAR granted
    under the Plan will expire upon the date determined by the
    Administrator, in its sole discretion, and set forth in the
    Award Agreement. Notwithstanding the foregoing, the rules of
    Section 8(c) also will apply to SARs.

 

    (i) Payment of SAR Amount.  Upon exercise
    of an SAR, a Participant will be entitled to receive payment
    from the Company in an amount determined by multiplying:

 

    (i) The difference between the Fair Market Value of a Share
    on the date of exercise over the exercise price; times

 

    (ii) The number of Shares with respect to which the SAR is
    exercised.

 

    At the discretion of the Administrator, the payment upon SAR
    exercise may be in cash, in Shares of equivalent value, or in
    some combination thereof.

 

    11. Restricted Stock Units.

 

    (a) Grant of Restricted Stock
    Units.  Restricted Stock Units may be granted to
    Service Providers at any time and from time to time, as will be
    determined by the Administrator, in its sole discretion. The
    Administrator will have complete discretion in determining the
    number of Restricted Stock Units granted to each Participant,
    subject to the limits set forth in Section 3 of the Plan.
    The following limitations shall apply to grants of Restricted
    Stock Units:

 

    (i) No Service Provider shall be granted, in any Fiscal
    Year, Restricted Stock Units covering more than
    750,000 Shares.

    

9

 

 

    (ii) The foregoing limitation shall be adjusted
    proportionately in connection with any change in the
    Company’s capitalization as described in Section 14.

 

    (iii) If a Restricted Stock Unit is cancelled in the same
    fiscal year of the Company in which it was granted (other than
    in connection with a transaction described in Section 14),
    the cancelled Restricted Stock Unit will be counted against the
    limit set forth in subsection (i) above.

 

    (b) Value of Restricted Stock Units.  Each
    Restricted Stock Unit will have an initial value that is
    established by the Administrator on or before the date of grant.

 

    (c) Performance Objectives and Other
    Terms.  The Administrator will set performance
    objectives or other vesting provisions (including, without
    limitation, continued status as a Service Provider) in its
    discretion which, depending on the extent to which they are met,
    will determine the number or value of Restricted Stock Units
    that will be paid out to the Service Providers. The time period
    during which the performance objectives or other vesting
    provisions must be met will be called the “Performance
    Period.” Each award of Restricted Stock Units will be
    evidenced by an Award Agreement that will specify the
    Performance Period, and such other terms and conditions as the
    Administrator, in its sole discretion, will determine. The
    Administrator may set performance objectives based upon the
    achievement of Company-wide, divisional, or individual goals,
    applicable federal or state securities laws, or any other basis
    determined by the Administrator in its discretion.

 

    (d) Earning of Restricted Stock
    Units.  After the applicable Performance Period
    has ended, the holder of Restricted Stock Units will be entitled
    to receive a payout of the number of Restricted Stock Units
    earned by the Participant over the Performance Period, to be
    determined as a function of the extent to which the
    corresponding performance objectives or other vesting provisions
    have been achieved. After the grant of a Restricted Stock Units,
    the Administrator, in its sole discretion, may reduce or waive
    any performance objectives or other vesting provisions for such
    Restricted Stock Unit.

 

    (e) Form and Timing of Payment of Restricted Stock
    Units.  Payment of earned Restricted Stock Units
    will be made as soon as practicable after the expiration of the
    applicable Performance Period. The Administrator, in its sole
    discretion, may pay earned Restricted Stock Units in the form of
    cash, in Shares (which have an aggregate Fair Market Value equal
    to the value of the earned Restricted Stock Units at the close
    of the applicable Performance Period) or in a combination
    thereof.

 

    (f) Cancellation of Restricted Stock
    Units.  On the date set forth in the Award
    Agreement, all unearned or unvested Restricted Stock Units will
    be forfeited to the Company, and again will be available for
    grant under the Plan.

 

    12. Leaves of Absence.  Unless the
    Administrator provides otherwise, vesting of Awards granted
    hereunder will be suspended during any unpaid leave of absence.
    A Service Provider will not cease to be an Employee in the case
    of (i) any leave of absence approved by the Company or
    (ii) transfers between locations of the Company or between
    the Company, its Parent, or any Subsidiary. For purposes of
    Incentive Stock Options, no such leave may exceed ninety
    (90) days, unless reemployment upon expiration of such
    leave is guaranteed by statute or contract. If reemployment upon
    expiration of a leave of absence approved by the Company is not
    so guaranteed, then three months following the 91st day of
    such leave any Incentive Stock Option held by the Participant
    will cease to be treated as an Incentive Stock Option and will
    be treated for tax purposes as a Nonstatutory Stock Option.

 

    13. Non-Transferability of Awards.  Unless
    determined otherwise by the Administrator, an Award may not be
    sold, pledged, assigned, hypothecated, transferred, or disposed
    of in any manner other than by will or by the laws of descent or
    distribution and may be exercised, during the lifetime of the
    Participant, only by the Participant. If the Administrator makes
    an Award transferable, such Award shall contain such additional
    terms and conditions as the Administrator deems appropriate.

 

    14. Adjustments Upon Changes in Capitalization,
    Dissolution, Merger or Asset Sale.

 

    (a) Changes in Capitalization.  Subject to
    any required action by the stockholders of the Company, the
    number and class of Shares that may be delivered under the Plan
    and/or the
    number, class, and price of Shares covered by each outstanding
    Award, and the numerical Share limits in
    Sections 3, 6, 9 and 11 of the Plan, shall be
    proportionately adjusted for any increase or decrease in the
    number of issued Shares resulting from a stock split,

    

10

 

    reverse stock split, stock dividend, combination or
    reclassification of the Shares, or any other increase or
    decrease in the number of issued Shares effected without receipt
    of consideration by the Company; provided, however, that
    conversion of any convertible securities of the Company shall
    not be deemed to have been “effected without receipt of
    consideration.” Such adjustment shall be made by the Board,
    whose determination in that respect shall be final, binding and
    conclusive. Except as expressly provided herein, no issuance by
    the Company of shares of stock of any class, or securities
    convertible into shares of stock of any class, shall affect, and
    no adjustment by reason thereof shall be made with respect to,
    the number or price of Shares subject to an Award.

 

    (b) Dissolution or Liquidation.  In the
    event of the proposed dissolution or liquidation of the Company,
    the Administrator shall notify each Participant as soon as
    practicable prior to the effective date of such proposed
    transaction. The Administrator in its discretion may provide for
    a Participant to have the right to exercise his or her Award
    until ten (10) days prior to such transaction as to all of
    the Optioned Stock covered thereby, including Shares as to which
    the Award would not otherwise be exercisable. In addition, the
    Administrator may provide that any Company repurchase option
    applicable to any Shares purchased upon exercise of an Award
    shall lapse as to all such Shares, provided the proposed
    dissolution or liquidation takes place at the time and in the
    manner contemplated. To the extent it has not been previously
    exercised, an Award will terminate immediately prior to the
    consummation of such proposed action.

 

    (c) Merger or Asset Sale.  In the event of
    a merger of the Company with or into another corporation, or the
    sale of substantially all of the assets of the Company, each
    outstanding Award shall be assumed or an equivalent option or
    right substituted by the successor corporation or a Parent or
    Subsidiary of the successor corporation. In the event that the
    successor corporation refuses to assume or substitute for the
    Award, the Participant will fully vest in and have the right to
    exercise all of his or her outstanding Options and Stock
    Appreciation Rights, including Shares as to which such Awards
    would not otherwise be vested or exercisable, all restrictions
    on Restricted Stock will lapse, and, with respect to Restricted
    Stock Units, all Performance Goals or other vesting criteria
    will be deemed achieved at target levels and all other terms and
    conditions met. In addition, if an Option or Stock Appreciation
    Right becomes fully vested and exercisable in lieu of assumption
    or substitution in the event of a merger or sale of assets, the
    Administrator will notify the Participant in writing or
    electronically that the Option or Stock Appreciation Right will
    be fully vested and exercisable for a period of 15 days
    from the date of such notice, and the Option or Stock
    Appreciation Right will terminate upon the expiration of such
    period.

 

    For the purposes of this paragraph, the Award shall be
    considered assumed if, following the merger or sale of assets,
    the Award confers the right to purchase or receive, for each
    Share subject to the Award immediately prior to the merger or
    sale of assets, the consideration (whether stock, cash, or other
    securities or property) or, in the case of a Stock Appreciation
    Right upon the exercise of which the Administrator determines to
    pay cash or a Restricted Stock Unit which the Administrator can
    determine to pay in cash, the fair market value of the
    consideration received in the merger or sale of assets by
    holders of Common Stock for each Share held on the effective
    date of the transaction (and if holders were offered a choice of
    consideration, the type of consideration chosen by the holders
    of a majority of the outstanding Shares); provided, however,
    that if such consideration received in the merger or sale of
    assets is not solely common stock of the successor corporation
    or its Parent, the Administrator may, with the consent of the
    successor corporation, provide for the consideration to be
    received upon the exercise of an Option or Stock Appreciation
    Right or upon the payout of a Restricted Stock Unit, for each
    Share subject to such Award (or in the case of Restricted Stock
    Units, the number of implied shares determined by dividing the
    value of the Restricted Stock Units by the per Share
    consideration received by holders of Common Stock in the merger
    or sale of assets), to be solely common stock of the successor
    corporation or its Parent equal in fair market value to the per
    Share consideration received by holders of Common Stock in the
    merger or sale of assets.

 

    Notwithstanding anything in this Section 14(c) to the
    contrary, an Award that vests, is earned or paid-out upon the
    satisfaction of one or more Performance Goals will not be
    considered assumed if the Company or its successor modifies any
    of such Performance Goals without the Participant’s
    consent; provided, however, a modification to such Performance
    Goals only to reflect the successor corporation’s corporate
    structure post-merger or post-sale of assets will not be deemed
    to invalidate an otherwise valid Award assumption.

 

    15. No Effect on Employment or
    Service.  Neither the Plan nor any Award will
    confer upon a Participant any right with respect to continuing
    the Participant’s relationship as a Service Provider with
    the Company, nor will they

    

11

 

    interfere in any way with the Participant’s right or the
    Company’s right to terminate such relationship at any time,
    with or without cause, to the extent permitted by Applicable
    Laws.

 

    16. Date of Grant.  The date of grant of
    an Award shall be, for all purposes, the date on which the
    Administrator makes the determination granting such Award, or
    such other later date as is determined by the Administrator.
    Notice of the determination shall be provided to each
    Participant within a reasonable time after the date of such
    grant.

 

    17. Amendment and Termination of the Plan.

 

    (a) Amendment and Termination.  The Board
    may at any time amend, alter, suspend or terminate the Plan.

 

    (b) Stockholder Approval.  The Company
    shall obtain stockholder approval of any Plan amendment to the
    extent necessary and desirable to comply with Applicable Laws.

 

    (c) Effect of Amendment or
    Termination.  No amendment, alteration, suspension
    or termination of the Plan shall impair the rights of any
    Participant, unless mutually agreed otherwise between the
    Participant and the Administrator, which agreement must be in
    writing and signed by the Participant and the Company.
    Termination of the Plan shall not affect the
    Administrator’s ability to exercise the powers granted to
    it hereunder with respect to Awards granted under the Plan prior
    to the date of such termination.

 

    18. Conditions Upon Issuance of Shares.

 

    (a) Legal Compliance.  Shares shall not be
    issued pursuant to the exercise of an Award unless the exercise
    of such Award and the issuance and delivery of such Shares shall
    comply with Applicable Laws and shall be further subject to the
    approval of counsel for the Company with respect to such
    compliance.

 

    (b) Investment Representations.  As a
    condition to the exercise of an Award, the Company may require
    the person exercising such Award to represent and warrant at the
    time of any such exercise that the Shares are being purchased
    only for investment and without any present intention to sell or
    distribute such Shares if, in the opinion of counsel for the
    Company, such a representation is required.

 

    19. Inability to Obtain Authority.  The
    inability of the Company to obtain authority from any regulatory
    body having jurisdiction, which authority is deemed by the
    Company’s counsel to be necessary to the lawful issuance
    and sale of any Shares hereunder, shall relieve the Company of
    any liability in respect of the failure to issue or sell such
    Shares as to which such requisite authority shall not have been
    obtained.

 

    20. Stockholder Approval.  The Plan shall
    be subject to approval by the stockholders of the Company within
    twelve (12) months after the date the Plan is adopted. Such
    stockholder approval shall be obtained in the manner and to the
    degree required under Applicable Laws.

    

12<PAGE>

EXHIBIT 10.53

[*] DENOTES EXPURGATED INFORMATION

                    SEPARATION AGREEMENT AND GENERAL RELEASE

     This SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is made by and
between JEFFREY D. WHITE who resides at [*] ("Mr. White") and THE BOSTON BEER
COMPANY, INC., a Massachusetts corporation with a principal place of business at
One Design Center Place, Suite 850, Boston, MA 02210, for itself and its various
subsidiaries and affiliates, including Boston Beer Corporation (collectively,
the "Company"), as of the Effective Date (as hereinafter defined).

     Mr. White has been employed by the Company as an employee-at-will and, most
recently, as its Chief Operating Officer. Mr. White and the Company have agreed
that Mr. White's employment with the Company shall terminate, on and subject to
the terms and conditions set forth in this Agreement.

     ACCORDINGLY, in consideration of the mutual covenants to be performed by
each of the parties and set forth in their entirety herein, the parties agree as
follows:

     1. SEPARATION FROM EMPLOYMENT. Mr. White will continue to perform his job
as the Company's Chief Operating Officer through April 27, 2007 (the "Separation
Date"), which shall be the last day of Mr. White's employment with the Company.
Prior to the Separation Date, Mr. White shall continue to perform his regular
and usual duties as Chief Operating Officer, which shall include support and
consulting to the new Vice President of Operations to ensure a smooth transition
of responsibilities, projects and business continuity. Mr. White shall also
endeavor to complete on or before the Separation Date the various special tasks
(the "Special Tasks") specified on Exhibit A attached hereto. Notwithstanding
the foregoing, Mr. White may devote one day a week on average to pursue career
counseling and new employment opportunities. Mr. White shall not, however, enter
into any verbal or written agreements or make any binding commitments on behalf
of the Company, except with the consent of Martin Roper, the Company's Chief
Executive Officer, nor shall Mr. White commit any act or omission which impacts
adversely on the business or reputation of the Company. Mr. White shall continue
to be paid his salary, at its current rate, and shall receive the benefits he
currently receives, provided he continues to make his employee contribution
therefor, through the Separation Date and shall be entitled to receive the bonus
earned by Mr. White for his performance in 2006 ($49,000). Mr. White shall be
paid his accrued but unused vacation pay for 2007, if any, on the Separation
Date. In addition, Mr. White shall be paid a bonus within fourteen (14) days
after Separation Date or the Effective Date, whichever is later, in accordance
with Exhibit A, provided he completes the Special Tasks to the reasonable
satisfaction of Mr. Roper. As of Separation Date, Employee will be relieved of
further duties and responsibilities and will no longer be authorized to transact
business on behalf of Company.

     2. CONSIDERATION. Provided Mr. White executes this Agreement, does not
rescind his asset to it as provided in paragraph 8 hereof, and complies with the
terms and conditions of this Agreement, the Company shall:

          (a) Pay Mr. White an amount equal to six (6) months of his salary at
his current rate, less applicable federal, state, local and other
employment-related deductions and payable in a lump sum within fourteen (14)
days after the Separation Date or the Effective Date, whichever is later (the
"Severance Payment");

                                       -1-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

          (b) Continue to pay its portion of the premium for Mr. White's health
and dental benefits that he is currently receiving as a Company benefit through
the Separation Date (the "Company's Share"). The Separation Date serves as a
"qualifying event" under the Consolidated Omnibus Budget Reconciliation Act
("COBRA") and, hence, health and dental coverage and premiums paid after the
Separation Date are pursuant to COBRA. After the Separation Date, the Company
will pay the Company's Share for coverage until December 31, 2007, provided that
Mr. White timely elects continuation of coverage under COBRA and has made
payments of the appropriate amounts due. Thereafter, Mr. White's medical and
dental benefits will be continued only to the extent available under COBRA. The
Company will forward to Mr. White separate correspondence regarding his COBRA
rights prior to the termination of his current benefits. The Employee shall have
the right to continue certain other benefits in accordance with any conversion
options that exist under Company's benefit plans and

          (c) Pay up to $40,000 in fees for outplacement and career counseling
services to a provider of Mr. White's choice, provided that such services are
utilized by Mr. White prior to December 31, 2007.

Mr. White acknowledges and agrees that the Severance Payment, the benefits and
the other consideration provided for in this Sections 2 are not otherwise due or
owing to Mr. White under any employment agreement (oral or written) with the
Company or any Company policy or practice, and that the Severance Payment and
the other consideration provided for herein are not intended to, and shall not
constitute, a severance plan, and shall confer no benefit on anyone other than
the Company and Mr. White. Mr. White further acknowledges that, except for the
specific financial consideration set forth in this Agreement, Mr. White is not
and shall not in the future be entitled to any other compensation or benefit
from the Company including, without limitation, other wages, commissions,
bonuses, options, stock awards, vacation pay, holiday pay or any other form of
compensation or benefit.

     3. ASSISTANCE BY MR. WHITE. Mr. White acknowledges that, during his
employment with the Company, he was either directly or indirectly involved in
various matters with respect to which the Company may, after the Separation
Date, request his assistance. Mr. White agrees to assist the Company, if
requested, in any and all matters relating to the Company which may arise as a
result of his direct or indirect involvement, at mutually convenient times. In
consideration for such services, and provided Mr. White executes this Agreement,
does not rescind his assent to it, and complies with its terms, the Company will
pay Mr. White a fee of $10,000 per month for a period of six (6) months,
commencing on the Separation Date. In addition, should Mr. White wish to
continue to be available for such consulting services at the conclusion of such
six (6) month period, he may, by providing written notice to the Chief Executive
Officer prior to the conclusion of such period, request an extension of up to
six (6) months (provided that all payments shall be made before March 15, 2008),
for which the Company will pay Mr. White a fee of $7,500 per month for
assistance to be provided by telephone or through electronic means.

     4. COVENANTS OF MR. WHITE. Mr. White expressly acknowledges and agrees to
the following:

          (a) that by the Separation Date Mr. White will have returned to the
Company all Company documents (and any copies thereof in whatever format) and
any Company property, including but not limited to, any keys or access badges to
the Company facilities and credit cards issued by the Company, and that Mr.
White shall abide by any and all common law

                                       -2-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

and/or statutory obligations relating to protection and non-disclosure of the
Company's trade secrets and/or confidential and proprietary documents and
information;

          (b) that all information relating in any way to the negotiation of
this Agreement, including the terms and amount of financial consideration
provided for in this Agreement, shall be held confidential by Mr. White and
shall not be publicized or disclosed to any person (other than an immediate
family member, legal counsel or financial advisor, provided that any such
individual to whom disclosure is made agrees to be bound by these
confidentiality obligations), business entity or government agency, except as
may be required in response to a lawful subpoena, or as may be required by state
or federal law;

          (c) that Mr. White will not reveal to any person, association or
company any trade secrets or confidential information of the Company, except as
may be required by the law to be disclosed, provided that Mr. White use his best
efforts to notify the Company orally and in writing before making any such
intended disclosure;

          (d) that Mr. White will keep secret all such matters that have been
entrusted to Mr. White and shall not use or attempt to use any such information
in any manner which may injure or cause loss to the Company, whether directly or
indirectly;

          (e) that Mr. White will not make any statements that are
professionally, commercially or personally disparaging about, or adverse to, the
interests of the Company (including its officers, directors and employees)
including, but not limited to, any statements that disparage any person,
product, service, finances, financial condition, capability or any other aspect
of the business of the Company, and that Mr. White will not engage in any
conduct which is intended to harm professionally, commercially or personally the
reputation of the Company (including its officers, directors and employees)
except as may be required in response to a lawful subpoena or legal process;

          (f) that Mr. White confirms his obligations contained in the
Employment Agreement previously executed by him, a copy of which is attached
hereto as Exhibit B and is incorporated herein and made a part hereof. The
period covered by the covenant not to compete shall commence as of the
Separation Date; and

          (g) that the violation of any of the foregoing covenants by Mr. White
would constitute a material breach of this Agreement which would entitle the
Company to recover some or all consideration paid or benefits provided pursuant
to paragraphs 2 or 3 hereof, as well as attorney's fees and other costs of suit
sustained by it in recovering such consideration or benefits, and to be
indemnified by Mr. White for such attorney's fees and costs. Mr. White
acknowledges that any breach of his obligations hereunder shall cause
irreparable harm to the Company for which there is no adequate remedy at law,
and that the Company, in its sole discretion, in addition to any other remedies
available to it, may bring an action or actions for injunctive relief, specific
performance, or both, and have entered a temporary restraining order,
preliminary or permanent injunction, or order compelling specific performance
and, if successful, recover the costs and attorneys' fees incurred by it in such
action from Mr. White.

     5. COVENANTS OF THE COMPANY. Provided Mr. White executes this Agreement,
does not rescind his assent to it complies with the terms of this Agreement,
Boston Beer agrees that:

                                       -3-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

          (a) the Company, by its directors and executive officers, on their own
behalf, or on behalf of the Company, will not make any statements that are
professionally, commercially or personally disparaging about Mr. White, or are
adverse to Mr. White's interests to any person outside of the Company; provided,
however, that the foregoing restrictions shall not apply to statements made in
response to a lawful subpoena or which may be required pursuant to state or
federal law; and

          (b) all information relating in any way to the negotiation of this
Agreement, including the terms and amount of financial consideration provided
for in this Agreement, shall be held confidential by the executive officers of
the Company, and shall not be publicized or disclosed to any person (other than
legal counsel or employees with a need to know, provided that any such
individual to whom disclosure is made agrees to be bound by these
confidentiality obligations), except as may be required in response to a lawful
subpoena, or as may be required by state or federal law, or in connection with
the Company's SEC filings; and

          (c) a violation of any of the foregoing covenants of the Company would
constitute a material breach of this Agreement which would entitle Mr. White to
recover attorney's fees and other costs of suit sustained by him in recovering
damages resulting from such material breach.

     6. GENERAL RELEASE OF CLAIMS BY MR. WHITE.

          (a) Mr. White hereby acknowledges and agrees that by signing this
Agreement and accepting any part of the consideration to be provided to him as
set forth herein, Mr. White is waiving his right to assert any form of legal
claim against the Company whatsoever for any alleged action, inaction or
circumstance existing or arising from the beginning of time through the
Effective Date (the "Claim" or "Claims"). Mr. White's waiver and release herein
is intended to bar any form of legalClaim, charge, complaint or any other form
of action against the Company seeking any form of relief including, without
limitation, equitable relief (whether declaratory, injunctive or otherwise), the
recovery of any damages or any other form of monetary recovery whatsoever
(including, without limitation, back pay, front pay, compensatory damages,
emotional distress damages, punitive damages, attorneys fees and any other
costs) against the Company, for any alleged action, inaction or circumstance
existing or arising through the Effective Date.

          (b) Without limiting the foregoing general waiver and release, Mr.
White specifically waives and releases the Company from any Claim arising from
or related to Mr. White's employment relationship with the Company or the
termination of his employment, including, without limitation:

               (i) Claims under any state or federal discrimination, fair
employment practices or other employment related statute, regulation or
executive order (as they may have been amended through the Effective Date)
prohibiting discrimination or harassment based upon any protected status
including, without limitation, race, national origin, age, gender, marital
status, disability, veteran status or sexual orientation. Without limitation,
specifically included in this paragraph are any Claims arising under the federal
Age Discrimination in Employment Act, the Older Workers Benefit Protection Act,
the Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With
Disabilities Act, Massachusetts General Laws Chapter 151B, and any similar
Massachusetts or other state statute;

                                       -4-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

               (ii) Claims under any other state or federal employment related
statute, regulation or executive order (as they may have been amended through
the Effective Date) relating to wages, hours or any other terms and conditions
of employment. Without limitation, specifically included in this paragraph are
any Claims arising under the Fair Labor Standards Act, the Family and Medical
Leave Act of 1993, the National Labor Relations Act, the Employee Retirement
Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act
of 1985 (COBRA) and any similar Massachusetts, or other state statute;

               (iii) Claims under any state or federal common law theory
including, without limitation, wrongful discharge, breach of express or implied
contract, promissory estoppel, unjust enrichment, breach of a covenant of good
faith and fair dealing, violation of public policy, defamation, interference
with contractual relations, intentional or negligent infliction of emotional
distress, invasion of privacy, misrepresentation, deceit, fraud or negligence;
and

               (iv) Any other Claim arising under state or federal law.

          (c) Notwithstanding the foregoing, this section does not release the
Company from (i) any obligation expressly set forth in this Agreement; (ii) any
right to indemnification to which Mr. White may be entitled under the Company's
Articles of Organization or By-laws; or (iii) any right to reimbursement for
business expenses incurred prior to the Separation Date in accordance with
Company policy.

     7. LIMITED RELEASE BY THE COMPANY. The Company hereby releases, waives and
discharges Mr. White from any and all causes of action or claims which relate to
good faith acts of commission or omission by Mr. White during the course of Mr.
White's employment by the Company undertaken or not undertaken in the reasonable
belief that such acts or omissions were in the best interest of the Company.
Nothing in the preceding sentence shall be construed to release any causes of
action or claims which may exist arising out of Mr. White's violation of any
state or federal laws or regulations. The Company represents and warrants that,
at the date hereof, the Company knows of no claims or causes of action arising
out of the performance of Mr. White's duties as Boston Beer's Chief Operating
Officer.

     8. RESCISSION. It is the Company's desire and intent to make certain that
Mr. White fully understands the provisions of this Agreement. To that end, Mr.
White has been advised, and has been given the opportunity, to consult with
legal counsel for the purpose of reviewing the terms of this Agreement. The
Company is providing Mr. White with twenty-one (21) days in which to consider
and accept the terms of this Agreement by signing below and returning it to the
Company. In addition, Mr. White may rescind his assent to this Agreement if,
within seven (7) days after he signs this Agreement, he delivers a notice of
rescission to Martin Roper, the Company's Chief Executive Officer. To be
effective, such rescission must be hand delivered or postmarked within the seven
(7) day period and sent by certified mail, return receipt requested, or by a
nationally-recognized overnight delivery service, to Mr. Roper at the Company's
principal offices in Boston, Massachusetts as set forth above. This Agreement
shall not be effective until such seven (7) day period has expired (the
"Effective Date"), and therefore Mr. White shall not receive the Severance
Payment or other consideration until, at the earliest, fourteen (14) days
following his execution of this Agreement.

     9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit and be
binding upon Mr. White and the Company and their respective heirs, personal
representatives,

                                       -5-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

successors and assigns. In the event of Mr. White's death, any remaining
Severance Payment shall continue to be paid to Mr. White's estate.

     10. VOLUNTARY AGREEMENT. By executing this Agreement, Mr. White is
acknowledging that he has been afforded sufficient time to understand the terms
and effects of this Agreement, that his agreements and obligations hereunder are
made voluntarily, knowingly and without duress, and that neither the Company nor
its agents or representatives have made any representations to Mr. White
inconsistent with the provisions of this Agreement or on which Mr. White have
relied in executing this Agreement, except as expressly set forth herein.

     11. ENTIRE AGREEMENT/CHOICE OF LAW/ENFORCEMENT. Mr. White acknowledges and
agrees that this Agreement supersedes any and all prior and contemporaneous oral
and/or written agreements between Mr. White and the Company, and sets forth the
entire agreement between Mr. White and the Company. No variations or
modifications hereof shall be deemed valid unless reduced to writing and signed
by the parties hereto. This Agreement shall be deemed to have been made in
Massachusetts, shall take effect as an instrument under seal within
Massachusetts, and shall be governed by and construed in accordance with the
laws of Massachusetts, without giving effect to conflict of law principles. Mr.
White agrees that any action, demand, claim or counterclaim relating to the
terms and provisions of this Agreement, or to its breach, shall be commenced in
Massachusetts in a court of competent jurisdiction, and Mr. White further
acknowledges that venue for such actions shall lie exclusively in Massachusetts.
The provisions of this Agreement are severable, and if for any reason any part
hereof shall be found to be unenforceable, the remaining provisions shall be
enforced in full.

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals
as of the dates set forth below.

/s/ Kathleen H. Wade                    /s/ Jeffrey D. White
-------------------------------------   ----------------------------------------
Witness                                 Jeffrey D. White

                                        Date: February 2, 2007

                                        THE BOSTON BEER COMPANY, INC., for
                                        itself, its subsidiaries and affiliates

/s/ Kathleen H. Wade                    By: /s/ Martin F. Roper
-------------------------------------       ------------------------------------
Witness                                     Authorized Signatory

                                        Date: February 5, 2007

                                       -6-

<PAGE>

[*] DENOTES EXPURGATED INFORMATION

                                    EXHIBIT A

                                  Special Tasks

Mr. White will use appropriate efforts to assist in completion of the following
tasks as requested by Mr. Koch, Mr. Roper or Mr. Lance.

     1.   Negotiation of [*]

     2.   Negotiation and completion of [*]

     3.   Negotiation and completion of [*]

     4.   Evaluation and negotiation of [*]

     5.   Evaluation, design and negotiation for [*]

     6.   Ongoing supervision of HR, Legal and other matters as requested.

     7.   Complete 2006 reviews, 2007 salary adjustments, 2006 bonus assessments
          and 2007 bonus designs for [*]

     8.   Such other matters as may arise to ensure both a smooth transition of
          responsibilities [*]

The expected bonus shall be $25,000, if appropriate efforts against these tasks
is applied.

                                       -7-
<PAGE>

                              EMPLOYMENT AGREEMENT

AGREEMENT entered into by and between BOSTON BEER COMPANY LIMITED PARTNERSHIP, a
Massachusetts limited partnership having its principal place of business at 30
Germania Street, Boston, Massachusetts 02130 (the "Company"), and the
undersigned employee of the Company (the "Employee").

     In consideration of the employment or continued employment of the Employee
by the Company and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Employee hereby agrees with the
Company as follows:

     1. Duties. The Company hereby agrees to employ or continue to employ the
Employee in the position identified below the Employee's signature on this
Agreement, and the Employee hereby accepts such employment. For so long as he
or she is employed by the Company, the Employee shall devote himself or herself
to the affairs of the Company on a full business time basis and shall not engage
in any other business activities, which, either singly or in the aggregate,
materially interfere with his or her duties to the Company.

     2. Compensation. In consideration for the performance by the Employee of
his or her duties hereunder, the Company shall pay to the Employee a base
salary, payable weekly at the current rate set forth below the Employee's
signature on this

                                   EXHIBIT B

<PAGE>

Agreement, and such other compensation as the Company may from time to time
determine, which the Employee agrees to accept in full satisfaction for his or
her services. The Employee shall also be entitled to participate in any employee
incentive compensation program (an "Incentive Plan"), adopted from time to time
by the Company for its employees generally.

     3. Proprietary Information. The Employee hereby acknowledges that the
techniques, recipes, formulas, programs, processes, designs and production,
distribution, business and marketing methods, manuals, training methods and
materials used and to be used by the Company are of a confidential and secret
character, of great value and proprietary to the Company. The Company shall give
or continue to give the Employee access to the foregoing categories or
confidential and secret information and the trade secrets of its customers
(collectively, "Proprietary Information"), so long as the Employee continues to
provide services to the Company, and permit the Employee to work thereon and
become familiar therewith to whatever extent the Company in its sole discretion
determines. The Employee agrees that, without the prior written consent of the
Company, he or she shall not, during his or her employment by the Company or at
any time thereafter, divulge to anyone or use to his or her benefit any
Proprietary Information, unless such Proprietary Information shall be in the
public domain in a reasonably integrated form through no fault of the Employee.

                                      -2-

<PAGE>

The Employee further agrees to take all reasonable precautions to protect from
loss or disclosure all documents supplied to the Employee by the Company and all
documents, notebooks, materials and other data relating to any work performed by
the Employee or others relating to the Proprietary Information, and upon
termination for whatever reason of the Employee's employment with the Company,
to deliver these documents, notebooks, materials and data forthwith to the
Company.

     4. Covenant Not-to-Compete. In specific consideration for his or her
eligibility to participate in an Incentive Plan, the Employee hereby agrees to
be bound by the provisions of this Section 4. During the period commencing on
the date hereof and continuing until the expiration of one (1) year from the
date on which the Employee last receives compensation in any form from the
Company, the Employee shall not, without the prior written consent of the
Company, which consent the Company may grant or withhold in its sole discretion,
engage, directly or indirectly, for his or her own account or the account of
others, as an employee, consultant, partner, officer, director or stockholder
(other than a holder of less than five percent (5%) of the issued and
outstanding stock or other equity securities of an issuer whose securities are
publicly traded), or otherwise, in the importing, production, marketing or
distribution to distributors of any beer or ale brewed outside of the United
States which is imported into the United States

                                      -3-

<PAGE>

or any American beer or ale having a wholesale price within twenty percent (20%)
of the wholesale price of any of the Company's products.

     5. Remedy for Breach. The Employee expressly recognizes that any breach of
this Agreement by him or her is likely to result in irreparable injury to the
Company and agrees that, in addition to any other rights or remedies which the
Company may have, the Company shall be entitled, if it so elects to institute
and prosecute proceedings in any court of competent jurisdiction, either in law
or in equity, to obtain damages for any breach of this Agreement; to enforce the
specific performance of this Agreement by the Employee; and to enjoin the
Employee from activities in violation of this Agreement.

     6. Entire Agreement; Modification. This instrument contains the entire
Agreement of the Company and the Employee with respect to the subject matter
contained herein and may be altered, amended or superseded only by an agreement
in writing, signed by both parties or the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought. No action or
course of conduct shall constitute a waiver of any of the terms and conditions
of this Agreement, unless such waiver is specified in writing, and then only to
the extent so specified. A waiver of any of the terms and conditions of this
Agreement on one occasion shall not constitute a waiver of the other terms and
conditions of this

                                      -4-

<PAGE>

Agreement, or of such terms and conditions, on any other occasion.

     7. Severability. The Employee and the Company hereby expressly agree that
the provisions of this Agreement are severable and, in the event that any court
of competent jurisdiction shall determine that any provision or covenant herein
contained is invalid, in whole or in part, the remaining provisions shall remain
in full force and effect and any such provision or covenant shall nevertheless
be enforceable as to the balance thereof.

     8. Binding Effect; Benefit. This Agreement shall be binding upon the
Employee, without regard to the duration of his or her employment by the Company
or the reasons for the cessation of such employment, and upon his or her
administrators, executors, heirs, and assigns, and shall inure to the benefit of
the Company and its affiliates and subsidiaries, and its and their successors
and assigns.

     9. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be considered and have the force and effect of an original.

     10. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.

                                      -5-

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed on its behalf and the Employee has hereunto set his or her hand and
seal, all as of the date first above written.

                                        BOSTON BEER COMPANY LIMITED
                                        PARTNERSHIP

                                        By: /s/ Alfred W. Rossow, Jr.
                                            ------------------------------------

                                        /s/ Jeffrey White
                                        ----------------------------------------
                                        Signature of Employee

                                        JEFFREY WHITE
                                        Name of Employee

                                        OPERATIONS MANAGER
                                        Position

                                        $57,500
                                        Current Pay Rate

                                       -6-

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