Document:

PYRAMID BREWERIES, INC.

                              Amended and Restated
                         1995 Employee Stock Option Plan

     SECTION 1 Purpose.  The purpose of the Pyramid Breweries,  Inc. Amended and
Restated  1995  Employee  Stock  Option Plan (the  "Plan") is to enable  Pyramid
Breweries,  Inc.  (the  "Company")  to attract and retain the services of people
with  training,  experience and ability and to provide  additional  incentive to
such persons by granting them an  opportunity to participate in the ownership of
the Company.

     SECTION 2 Stock  Subject to Plan.  The stock  subject to this Plan shall be
the  Company's  common  stock,  par value $.01 per share (the  "Common  Stock"),
presently  authorized  but  unissued or  subsequently  acquired by the  Company.
Subject to adjustment as provided in Section 10, the aggregate  amount of Common
Stock  reserved for issuance or delivery  upon  exercise of all options  granted
under  this  Plan  shall  not  exceed  1,315,000  shares  of  Common  Stock,  as
constituted  on date of adoption of this Plan by the Board of Directors.  If any
option  granted under this Plan shall expire or terminate for any reason without
having been exercised in full,  the  unpurchased  shares  subject  thereto shall
thereupon  again  be  available  for  purposes  of  this  Plan,   including  for
replacement  options  which  may  be  granted  in  exchange  for  such  expired,
surrendered, exchanged, canceled or terminated options.

     SECTION 3  Administration.  The Plan shall be  administered by the Board of
Directors of the Company, in accordance with the following terms and conditions:

          3.1 General Authority.  Subject to the express provisions of the Plan,
the Board of Directors shall have the authority, in its discretion, to determine
all matters  relating  to options to be granted  under the Plan,  including  the
selection  of  individuals  to be  granted  options,  the number of shares to be
subject to each option, the exercise price, the term, whether such options shall
be immediately  exercisable or shall become exercisable in increments over time,
and all other terms and  conditions  thereof.  Grants under this Plan to persons
eligible  need not be identical in any respect,  even when made  simultaneously.
The  Board of  Directors  may from  time to time  adopt  rules  and  regulations
relating to the  administration of the Plan. The interpretation and construction
by the Board of Directors of any terms or  provisions of this Plan or any option
issued  hereunder,  or of any  rule  or  regulation  promulgated  in  connection
herewith,  shall be conclusive and binding on all interested parties.  The Board
of  Directors  in  its  sole  discretion,  may  grant  incentive  stock  options
("Incentive  Stock  Options")  as such term is  defined  in  Section  422 of the
Internal  Revenue Code of 1986,  as amended,  (the "Code")  and/or  nonqualified
stock options  ("Nonqualified Stock Options").  A Nonqualified Stock Option is a
stock option which is not an Incentive Stock Option. The type of option granted,
whether an  Incentive  Stock  Option or a  Nonqualified  Stock  Option  shall be
clearly identified by the Board of Directors when granted.  The term option when
used in this Plan should refer to Incentive Stock Options and Nonqualified Stock
Options, collectively.

          3.2  Delegation to a Committee.  Notwithstanding  the  foregoing,  the
Board of  Directors,  if it so  determines,  may  delegate to a committee of the
Board of Directors  consisting  of two or members any or all  authority  for the
administration of the Plan, and thereafter references to the Board of Directors

<PAGE>

in this Plan shall be deemed to be  references  to the  committee  to the extent
provided in the resolution establishing the committee.

          3.3  Persons  Subject to Section  16(b).  It is the  intention  of the
Company that, if any of the Company's equity securities are registered  pursuant
to  Section  12(b) or 12(g) of the 1934  Act,  this  Plan  shall  comply  in all
respects  with Rule 16b-3  under the 1934 Act.  If any Plan  provision  is later
found not to be in compliance  with such Section,  the provision shall be deemed
null and void,  and in all events  this Plan shall be  construed  in favor of it
meeting the requirements of Rule 16b-3.  Notwithstanding anything in the Plan to
the contrary, the Board of Directors, in its absolute discretion,  may bifurcate
the Plan so as to restrict,  limit or condition  the use of any provision of the
Plan to participants who are officers and directors  subject to Section 16(b) of
the 1934 Act  without so  restricting,  limiting or  conditioning  the Plan with
respect to other participants.

          3.4  Replacement of Options.  The Board of Directors,  in its absolute
discretion,  may grant options subject to the condition that options  previously
granted  at a higher or lower  exercise  price  under the Plan be  cancelled  or
exchanged in connection with such grant. The number of shares covered by the new
options,  the exercise price, the term and the other terms and conditions of the
new option, shall be determined in accordance with the Plan and may be different
from the provisions of the cancelled or exchanged  options.  Alternatively,  the
Board of Directors  may, with the agreement of the  Optionee,  amend  previously
granted  options to establish the exercise price at the then current fair market
value of the Company's Common Stock.

          3.5  Loans to  Optionees.  The  Board of  Directors,  in its  absolute
discretion,  may provide that the Company loan to Optionees  sufficient funds to
exercise any option  granted  under the Plan and/or to pay  withholding  tax due
upon exercise of such option. The Board of Directors shall have the authority to
make such  determinations  at the time of grant or exercise and shall  establish
repayment terms thereof, including installments, maturity and interest rate.

     SECTION 4  Eligibility.  Options may be granted only to persons who, at the
time  the  option  is  granted,   are  employees,   consultants  or  independent
contractors  of the Company or any of its present or future parent or subsidiary
corporations  (as those  terms are used in  Section  422(a)(2)  and  (d)(1)  and
Section 424(e) and (f) of the Code,  hereafter a "Parent" or "Subsidiary").  Any
individual  to whom an option is granted  under this Plan shall be  referred  to
hereinafter  as  "Optionee."  Any  Optionee  may  receive  one or more grants of
options as the Board of Directors as shall from time to time determine, and such
determinations  may be different as to  different  Optionees  and may vary as to
different  grants.  Optionees  who are not  employees  will only be  eligible to
receive Nonqualified Stock Options.

     SECTION 5 Terms and Conditions of Options.  Options granted under this Plan
shall be  evidenced  by written  agreements  which  shall  contain  such  terms,
conditions,  limitations  and  restrictions as the Board of Directors shall deem
advisable and which are not  inconsistent  with this Plan.  Each option  granted
hereunder  shall clearly  indicate  whether it is an Incentive Stock Option or a
Nonqualified Stock Option. Notwithstanding the foregoing, all such options shall
include or incorporate by reference the following terms and conditions:

                                       2
<PAGE>

          5.1 Number of Shares;  Exercise  Price.  The maximum  number of shares
that may be  purchased  pursuant  to the  exercise  of each  option  shall be as
established by the Board of Directors. The exercise price of all options granted
hereunder  shall be as  established  by the Board of Directors,  but in no event
shall be less than the fair  market  value per share of the Common  Stock at the
time the  option  is  granted,  as  determined  in good  faith  by the  Board of
Directors.

          5.2  Duration of Options.  Subject to the  restrictions  contained  in
Section  9,  the  term of each  option  shall  be  established  by the  Board of
Directors  and,  if not so  established,  shall be ten years from the date it is
granted, but in no event shall the term of any Incentive Stock Option exceed ten
years.

          5.3 Exercisability.  Each option shall prescribe the installments,  if
any, in which an option  granted  under the Plan shall become  exercisable.  The
Board of Directors,  in its absolute  discretion,  may waive or  accelerate  any
installment  requirement  contained in  outstanding  options.  In no case may an
option be exercised as to less than 100 shares at any one time (or the remaining
shares  covered by the option if less than 100)  during the term of the  option.
Only whole shares shall be issued pursuant to the exercise of any option.

          5.4 Incentive Stock Option. Any option which is issued as an Incentive
Stock Option under this Plan,  shall,  notwithstanding  any other  provisions of
this  Plan or the  option  terms  to the  contrary,  contain  all of the  terms,
conditions,  restrictions,  rights and  limitations  required to be an Incentive
Stock Option, and any provision to the contrary shall be disregarded.  The Board
of Directors  may require an Optionee to give the Company  prompt  notice of any
disposition  of shares of Common Stock  acquired by the exercise of an Incentive
Stock Option prior to the expiration of two years after the date of grant of the
option and one year from the date of exercise.

     SECTION 6  Nontransferability  of Options.  Options granted under this Plan
and the rights and privileges conferred hereby may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or the applicable laws of descent and distribution, and shall
not be subject to execution,  attachment or similar process. Upon any attempt to
transfer,  assign, pledge,  hypothecate or otherwise dispose of any option under
this Plan or any right or privilege conferred hereby, contrary to the provisions
hereof,  or upon the sale or levy or any  attachment  or similar  process,  such
option thereupon shall terminate and become null and void.  During an Optionee's
lifetime, any options granted under this Plan are personal to him or her and are
exercisable  solely by such  Optionee.  Notwithstanding  the  foregoing,  to the
extent  permitted by Rule 16b-3 under the 1934 Act and other  applicable law and
regulation,  the  Company  may permit an  Optionee  to,  during  the  Optionee's
lifetime,  designate a person who may exercise  the option after the  Optionee's
death  by  giving  written  notice  of such  designation  to the  Company  (such
designation  may be changed from time to time by the Optionee by giving  written
notice  to the  Company  revoking  any  earlier  designation  and  making  a new
designation).

     SECTION 7 Certain Limitations  Regarding Incentive Stock Options. The grant
of  Incentive   Stock  Options  shall  be  subject  to  the  following   special
limitations:

                                       3
<PAGE>

Limitation on Amount of Grants.  As to all Incentive Stock Options granted under
the terms of this Plan,  to the extent that the  aggregate  fair market value of
the stock  (determined  at the time the Incentive  Stock Option is granted) with
respect to which  Incentive  Stock Options are exercisable for the first time by
the Optionee  during any calendar year (under this Plan and all other  incentive
stock  option  plans of the  Company,  a related  corporation  or a  predecessor
corporation)  exceeds  $100,000,  such options shall be treated as  Nonqualified
Stock Options.  The previous  sentence  shall not apply if the Internal  Revenue
Service  issues a public  rule,  issues a  private  ruling to the  Company,  any
Optionee or any legatee,  personal  representative or distributes of an Optionee
or issues  regulations  changing  or  eliminating  such  annual  limit.  No such
limitation shall apply to Nonqualified Stock Options.

Grants to 10%  Shareholders.  Incentive  Stock  Options  may be granted a person
owning more than 10% of the total combined  voting power of all classes of stock
of the Company and any Parent or Subsidiary only if (a) the exercise price is at
least 110% of the fair market  value of the stock at the time of grant,  and (b)
the option is not  exercisable  after the expiration of five years from the date
of grant.

     SECTION 8 Exercise of Options.  Options  shall be exercised  in  accordance
with the following terms and conditions:

          8.1  Procedure.  Options shall be exercised by delivery to the Company
of written  notice of the number of shares  with  respect to which the option is
exercised.

          8.2 Payment.  Payment of the option price shall be made in full within
5 business  days of the notice of exercise of the option and shall be in cash or
bank-certified  or cashier's  checks,  or personal  check or promissory  note if
permitted by the Board of Directors.  To the extent permitted by applicable laws
and regulations (including,  but not limited to, federal tax and securities laws
and  regulations),  an option may be  exercised  by delivery of shares of Common
Stock of the  Company  which have been held by the  Optionee  for a period of at
least six months  having a fair market value equal to the exercise  price,  such
fair market value to be determined in good faith by the Board of Directors. Such
payment in stock may occur in the  context of a single  exercise of an option or
successive and simultaneous  exercises,  sometimes  referred to as "pyramiding,"
which provides that, rather than physically exchanging certificates for a series
of exercises, bookkeeping entries will be made pursuant to which the Optionee is
permitted to retain his existing stock  certificate and a new stock  certificate
is issued for the net shares.

         If the Company's  Common Stock is registered under the 1934 Act, and if
permitted by the Board of Directors,  and to the extent  permitted by applicable
laws and regulations, (including, but not limited to, federal tax and securities
laws and  regulations) an option also may be exercised by delivery of a properly
executed  exercise notice together with irrevocable  instructions to a broker to
promptly  deliver to the Company the amount of sale or loan  proceeds to pay the
exercise price.

          8.3 Federal Withholding Tax Requirements.  Upon exercise of an option,
the  Optionee  shall,  upon  notification  of the  amount  due and  prior  to or
concurrently with the delivery of the certificates  representing the shares, pay

                                       4
<PAGE>

to the Company amounts necessary to satisfy applicable federal,  state and local
withholding tax requirements or shall otherwise make  arrangements  satisfactory
to the Company for such requirements.  In order to implement this provision, the
Company or any related  corporation  shall have the right to retain and withhold
from any  payment  of cash or Common  Stock  under this Plan the amount of taxes
required by any  government  to be withheld or otherwise  deducted and paid with
respect to such payment. At its discretion,  the Company may require an Optionee
receiving  shares of Common  Stock to  reimburse  the Company for any such taxes
required to be withheld by the Company and withhold any distribution in whole or
in part until the Company is so reimbursed.  In lieu thereof,  the Company shall
have the right to withhold from any other cash amounts due or to become due from
the Company to the Optionee an amount equal to such taxes.  The Company may also
retain and  withhold  or the  Optionee  may elect,  subject to  approval  by the
Company at its sole discretion, to have the Company retain and withhold a number
of shares having a market value not less than the amount of such taxes  required
to be withheld by the  Company to  reimburse  the Company for any such taxes and
cancel (in whole or in part) any such shares so withheld.

     SECTION 9 Termination of Employment, Disability and Death

          9.1 General.  If the  employment  of the  Optionee by the  Company,  a
Parent or a Subsidiary  shall  terminate by  retirement  or for any reason other
than death,  disability or cause as hereinafter provided, (a) an Incentive Stock
Option may be exercised by the Optionee at any time prior to the  expiration  of
three months after the date of such  termination  of  employment  (unless by its
terms the option sooner  terminates or expires),  and (b) a  Nonqualified  Stock
Option may be exercised by the Optionee at any time prior to the  expiration  of
twelve months after the date of such  termination  of employment  (unless by its
terms the option sooner terminates or expires), but in each case only if, and to
the extent the  Optionee was entitled to exercise the option at the date of such
termination.

          9.2  Disability.  If the employment of the Optionee by the Company,  a
Parent or a Subsidiary is terminated  because of the  Optionee's  disability (as
herein  defined),  the option may be exercised by the Optionee at any time prior
to the expiration of one year after the date of such termination  (unless by its
terms the option sooner  terminates or expires),  but only if, and to the extent
the  Optionee  was  entitled  to  exercise  the  option  at  the  date  of  such
termination.  For purposes of this section, an Optionee will be considered to be
disabled if the Optionee is unable to engage in any substantial gainful activity
by reason of any medically  determinable mental or physical impairment which can
be  expected to result in death or which has lasted or can be expected to last a
continuous period of not less than 12 months.

          9.3  Death.  In the  event of the  death of an  Optionee  while in the
employ of the Company, a Parent or a Subsidiary, the option shall be exercisable
on or prior to the  expiration  of one year after the date of such death (unless
by its terms the option sooner  terminates and expires),  but only if and to the
extent the  Optionee  was  entitled to exercise the option at date of such death
and  only  by  the  Optionee's  personal   representative  if  then  subject  to
administration as part of the Optionee's  estate, or by the person or persons to
whom such Optionee's rights under the option shall have passed by the Optionee's
will or by the applicable laws of descent and distribution.

                                       5
<PAGE>

          9.4  Termination  for Cause.  If the  Optionee's  employment  with the
Company,  a Parent or a Subsidiary is terminated  for cause,  any option granted
hereunder  shall  automatically  terminate as of the first advice or  discussion
thereof,  and such Optionee shall thereupon have no right to purchase any shares
pursuant  to such  option.  "Termination  for Cause"  shall mean  dismissal  for
dishonesty,  conviction or confession of a crime punishable by law (except minor
violations),  intoxication  while at work,  fraud,  misconduct  or disclosure of
confidential information.

          9.5 Waiver or Extension of Time Periods.  The Board of Directors shall
have the authority, prior to or within the times specified in this Section 9 for
the  exercise  of any such  option,  to extend  such time period or waive in its
entirety any such time period to the extent that such time period  expires prior
to the  expiration  of the  term of such  option.  In  addition,  the  Board  of
Directors may grant,  pursuant to a specific  resolution  adopted at the time of
grant,  modify or  eliminate  the time  periods  specified  in this  Section  9.
However,  no Incentive Stock Option may be exercised after the expiration of ten
(10) years  from the date such  option is  granted.  If an  Optionee  holding an
Incentive  Stock  Option  exercises  such  option,  by  permission,   after  the
expiration  of the various  time  periods  specified  in this  Section 9, and by
virtue of such  exercise the option is no longer  treated as an Incentive  Stock
Option under the Code,  such Option  shall  automatically  be  converted  into a
Nonqualified Stock Option.

          9.6  Termination  of  Options.  To the  extent  that the option of any
deceased  Optionee or of any Optionee whose  employment is terminated  shall not
have been exercised within the limited periods prescribed in this Section 9, all
further  rights to  purchase  shares  pursuant  to such  option  shall cease and
terminate at the  expiration  of such period.  No Incentive  Stock Option may be
exercised  after the  expiration  of ten (10) years from the date such option is
granted, notwithstanding any provision to the contrary.

          9.7 Non-employee  Optionees.  Options granted to Optionees who are not
employees  of the Company,  a Parent or a Subsidiary  at the time of grant shall
not be subject to the  provisions  of this  Section  9,  except as  specifically
provided in the option.

     SECTION 10 Acceleration upon Change in Control.  Notwithstanding  any other
provision  of the Plan,  if the Board  determines  that a Change in Control  (as
defined in the next  paragraph)  has occurred or is about to occur,  the options
theretofore  granted  hereunder  to a person  who at the time of the  Change  in
Control is an employee,  consultants or independent contractor of the Company or
any of its  subsidiaries  shall,  subject to the  approval  of the Board and the
satisfaction  of any applicable  requirements or limitations of Rule 16b-3 under
the  Exchange  Act,  become  exercisable  to the  full  extent  theretofore  not
exercised,  but in no event after the option period specified in each individual
option agreement.

         For  purposes  of this  Section  10 only,  a Change in  Control  of the
Company  shall be deemed to have  occurred if (A) any  "person" (as such term is
used in Sections  13(d) and 14(d) of the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange  Act")),  other than a trustee or other fiduciary holding
securities  under  an  employee  benefit  plan  of  the  Company,   becomes  the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or  indirectly,  of  securities of the Company  representing  25% or more of the
combined  voting power of the  Company's  then  outstanding  securities,  or (B)
during any period of two consecutive  years  individuals who at the beginning of

                                       6
<PAGE>

such period  constitute  the Board and any new  director  (other than a director
designated  by a person who has entered  into an  agreement  with the Company to
effect a transaction  described in clauses (A) or (C) of this  paragraph)  whose
election by the Board or nomination  for election by the Company's  stockholders
was approved by a vote of at least  two-thirds (2/3) of the directors then still
in office who either  were  directors  at the  beginning  of the period or whose
election or nomination  for election was  previously so approved,  cease for any
reason to constitute a majority thereof,  or (C) the stockholders of the Company
approve a merger or  consolidation  of the Company  with any other  corporation,
other than a merger or consolidation which would result in the voting securities
of the Company  outstanding  immediately  prior thereto  continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the  surviving  entity) at least 80% of the combined  voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation,  or the stockholders of the Company approve a plan
of  complete  liquidation  of the  Company  or an  agreement  for  the  sale  or
disposition by the Company of all or substantially all the Company's assets.

     SECTION 11 Option Adjustments

          11.1 Adjustments Upon Changes in Capitalization.  The aggregate number
and class of shares on which options may be granted under this Plan, the Maximum
Annual  Optionee  Grant set forth in Section 5.1, the number and class of shares
covered by each outstanding option and the exercise price per share thereof (but
not the  total  price),  and all such  options,  shall  each be  proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock of the Company  resulting from a split-up,  spin-off or  consolidation  of
shares or any like capital adjustment, or the payment of any stock dividend.

          11.2 Effect of Certain Transactions.  Except as provided in subsection
11.2,  upon  a  merger,   consolidation,   acquisition  of  property  or  stock,
separation, reorganization (other than a merger or reorganization of the Company
in which  the  holders  of  Common  Stock  immediately  prior to the  merger  or
reorganization  have the same  proportionate  ownership  of Common  Stock in the
surviving  corporation  immediately  after  the  merger  or  reorganization)  or
liquidation of the Company, as a result of which the shareholders of the Company
receive  cash,  stock or other  property in exchange  for their shares of Common
Stock,  any option granted  hereunder shall  terminate,  but,  provided that the
Optionee   shall  have  the  right   immediately   prior  to  any  such  merger,
consolidation,  acquisition of property or stock, separation,  reorganization or
liquidation to exercise his or her option in whole or in part whether or not the
vesting requirements set forth in the option agreement have been satisfied.

          11.3  Conversion  of  Options  on Stock  for  Stock  Exchange.  If the
shareholders  of the  Company  receive  capital  stock  of  another  corporation
("Exchange  Stock")  in  exchange  for  their  shares  of  Common  Stock  in any
transaction involving a merger, consolidation, acquisition of property or stock,
separation  or  reorganization  (other  than a merger or  reorganization  of the
Company in which the holders of Common Stock  immediately prior to the merger or
reorganization  have the same  proportionate  ownership  of Common  Stock in the
surviving  corporation  immediately  after the  merger or  reorganization),  all
options  granted  hereunder  shall terminate in accordance with the provision of
subsection  11.2 unless the Board of Directors and the  corporation  issuing the
Exchange  Stock,  in their  sole and  arbitrary  discretion  and  subject to any

                                       7
<PAGE>

required action by the shareholders of the Company and such  corporation,  agree
that all such options  granted  hereunder are converted into options to purchase
shares of  Exchange  Stock.  The amount and price of the such  options  shall be
determined by adjusting the amount and price of the options granted hereunder in
the same  proportion  as used for  determining  the number of shares of Exchange
Stock the holders of the Common  Stock  receive in such  merger,  consolidation,
acquisition  of property or stock,  separation  or  reorganization.  The vesting
schedule  set  forth in the  option  agreement  shall  continue  to apply to the
options granted for the Exchange Stock.

          11.4 Fractional  Shares.  In the event of any adjustment in the number
of shares  covered by any option,  any  fractional  shares  resulting  from such
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.

          11.5  Determination  of  Board  of  Directors  to be  Final.  All such
adjustments  shall be made by the Board of Directors and its determination as to
what adjustments shall be made, and the extent thereof,  shall be final, binding
and conclusive.

     SECTION 12 Securities Regulations

          12.1 Compliance.  Shares shall not be issued with respect to an option
granted  under this Plan unless the exercise of such option and the issuance and
delivery  of such  shares  pursuant  thereto  shall  comply  with  all  relevant
provisions  of  law,  including,   without  limitation,   any  applicable  state
securities laws, the Securities Act of 1933, as amended, the 1934 Act, the rules
and regulations  promulgated  thereunder,  and the requirements of NASDAQ or any
stock  exchange  upon which the shares may then be listed,  and shall further be
subject  to the  approval  of  counsel  for the  Company  with  respect  to such
compliance.  Inability of the Company to obtain from any regulatory  body having
jurisdiction,  the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder,  shall relieve the Company
of any  liability  in respect of the  nonissuance  or sale of such  shares as to
which such requisite authority shall not have been obtained.

          12.2 Representations by Optionee. As a condition to the exercise of an
option,  the Company may require the  Optionee 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  representation is required
by any relevant provision of the laws referred to in Section 12.1. At the option
of the Company,  a stop transfer order against any shares of stock may be placed
on the official stock books and records of the Company,  and a legend indicating
that the stock  may not be  pledged,  sold or  otherwise  transferred  unless an
opinion of counsel  was  provided  (concurred  in by  counsel  for the  Company)
stating  that  such  transfer  is not in  violation  of  any  applicable  law or
regulation, may be stamped on the stock certificate in order to assure exemption
from registration.  The Board of Directors may also require such other action or
agreement by the  Optionees as may from time to time be necessary to comply with
the federal and state  securities  laws.  This provision  shall not obligate the
Company to undertake registration of options or stock hereunder.

     SECTION 13 Employment  Rights.  Nothing in this Plan or any option or right
granted pursuant hereto shall confer upon any Optionee any right to be continued

                                       8
<PAGE>

in the  employment or service of the Company,  a Parent or any Subsidiary of the
Company or to remain a director,  or to  interfere  in any way with the right of
the Company,  a Parent or any Subsidiary,  in its sole discretion,  to terminate
such Optionee's employment or service at any time or to remove the Optionee as a
director at any time.

     SECTION 14 Amendment and Termination

          14.1 Action by Shareholders.  The Plan may be terminated,  modified or
amended by the shareholders of the Company.

          14.2 Action by Board of  Directors.  The Board of Directors may at any
time  suspend,  amend or  terminate  this  Plan,  provided  that,  to the extent
required for compliance with Rule 16b-3  promulgated  under Section 16(b) of the
1934 Act,  Section 422 of the Code or by any applicable  law or regulation,  the
Company's shareholders must approve any amendment which will:

               (a) Increase the number of shares in the  aggregate  which may be
sold pursuant to options granted under the Plan;

               (b)  Materially  increase the benefits  accruing to  participants
under the Plan; or

               (c) Change  the terms of the Plan  which  causes the Plan to lose
its  qualification  as an incentive  stock option plan under  Section 422 of the
Code.

         No  termination,  suspension or amendment of the Plan may,  without the
consent of each Optionee to whom any option shall theretofore have been granted,
adversely affect the rights of such Optionees under such options.

          14.3 Automatic  Termination.  Unless the Plan shall  theretofore  have
been  terminated as herein  provided,  this Plan shall  terminate ten (10) years
from the earlier of: (a) the date on which the Plan is adopted;  or (b) the date
on which this Plan is approved by the shareholders of the Company. No option may
be granted after such  termination,  or during any  suspension of this Plan. The
amendment  or  termination  of this Plan shall not,  without  the consent of the
Optionee, alter or impair any rights or obligations under any option theretofore
granted under this Plan.

     SECTION 15 Effective Date of the Plan. This Plan shall become  effective on
the date of its  adoption by the Board of  Directors  of the Company and options
may be granted  immediately  thereafter but no option may be exercised under the
Plan  unless  and until the Plan shall have been  approved  by the  shareholders
within  12  months  after  the  date of  adoption  of the  Plan by the  Board of
Directors.  If such approval is not obtained within such period the Plan and any
options granted thereunder shall be null and void.

                                       9PYRAMID BREWERIES, INC.
                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

     1. Purpose of the Plan. Under this Non-Employee  Director Stock Option Plan
(the "Director Plan") of Pyramid Breweries,  Inc., a Washington corporation (the
"Company"),  options may be granted to eligible persons, as set forth in Section
4, to purchase  shares of the  Company's  common stock  ("Common  Stock").  This
Director Plan is designed to promote the long-term growth and financial  success
of the Company by enabling  the Company to  attract,  retain and  motivate  such
persons  by  providing  for or  increasing  their  proprietary  interest  in the
Company.

     2. Effective Date. This Director Plan shall be in effect  commencing on the
date of closing of the initial  public  offering of the Company's  Common Stock,
subject to approval by the  Company's  stockholders.  Options may not be granted
more than ten years after the date of stockholder approval of this Director Plan
or  termination  of this  Director Plan by the Board of Directors of the Company
(the "Board"), whichever is earlier.

     3. Plan Operation.  This Director Plan is intended to meet the requirements
of Rule  16b-3(c)(2)(ii)  adopted under the Securities  Exchange Act of 1934 (or
its successor) and  accordingly is intended to be  self-governing.  To this end,
this Director Plan requires no discretionary  action by any administrative  body
with regard to any transaction  under this Director Plan. To the extent, if any,
that any  questions  of  interpretation  arise,  these  shall be resolved by the
Board.

     4.  Eligible   Persons.   The  persons  eligible  to  receive  a  grant  of
non-qualified  stock options  hereunder are any Director of the Board who on the
date of said grant is not an  employee  of the  Company or a  subsidiary  of the
Company.  For purposes of this Section 4, a person  shall not be  considered  an
employee solely by reason of serving as Chairman of the Board.

     5. Stock Subject to Director Plan. The maximum number of shares that may be
subject to options  granted  hereunder shall be 250,000 shares of Common Stock ,
subject to  adjustments  under  Section 6. Shares of Common Stock subject to the
unexercised  portions  of any options  granted  under this  Director  Plan which
expire,  terminate or are  canceled  may again be subject to options  under this
Director Plan.

     6.  Adjustments.  If the  outstanding  shares  of stock of the  class  then
subject to this Director Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more  reorganizations,  recapitalizations,  stock  splits,  reverse stock
splits, stock dividends,  spin-offs and the like, appropriate  adjustments shall
be made in the number and/or type of shares or securities  for which options may
thereafter  be  granted  under this  Director  Plan and for which  options  then
outstanding  under this  Director Plan may  thereafter  be  exercised.  Any such
adjustments in outstanding  options shall be made without changing the aggregate
exercise price applicable to the unexercised portions of such options.

<PAGE>

     7. Stock Options. Commencing on the date of the first annual meeting of the
Company's  shareholders  to be held  following  the close of the initial  public
offering of this Company's  Common Stock, and on the date of each annual meeting
of the  Company's  shareholders  thereafter,  each person who is a  non-employee
director of the Board  immediately  following  each such annual  meeting will be
automatically  granted a non-qualified  stock option to purchase 5,000 shares of
the Company's  Common Stock. The per share exercise price of each option will be
the fair market  value of a share of the  Company's  Common Stock on the date of
grant,  defined as the closing price of the Company's Common Stock on the NASDAQ
National Market (or such other  securities  market on which the Company's Common
Stock is  primarily  traded) on such date.  Each  option will have a term of ten
years and shall become immediately  exercisable in full on the date of grant. If
on any date upon which  options are to be granted  under this  Director Plan the
number of shares of Common Stock remaining available under the Director Plan are
less than the number of shares  required for all grants to be made on such date,
then  options to purchase a  proportionate  amount of such  available  number of
shares of Common Stock shall be granted to each eligible non-employee director.

     8.  Documentation of Grants.  Awards made under this Director Plan shall be
evidenced by written  agreements or such other appropriate  documentation as the
Board  shall  prescribe.  The  Board  need  not  require  the  execution  of any
instrument or  acknowledgment of notice of an award under this Director Plan, in
which case  acceptance of such award by the respective  optionee will constitute
agreement to the terms of the award.

     9. Nontransferability. Any option granted under this Director Plan shall by
its terms be  nontransferable by the optionee otherwise than by will or the laws
of descent and  distribution,  and shall be  exercisable,  during the optionee's
lifetime, only by the optionee.

     10.  Amendment and Termination.  The Board may alter,  amend,  suspend,  or
terminate  this  Director  Plan,  provided that no such action shall deprive any
optionee, without his consent, of any option granted to the optionee pursuant to
this  Director  Plan or of any of his  rights  under such  option  and  provided
further that the provisions of this Director Plan  designating  persons eligible
to participate  in the Director Plan and  specifying the amount,  exercise price
and timing of grants under the Director Plan shall not be amended more than once
every six months  other than to comport  with  changes in the  Internal  Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder.

     11. Termination of Directorship.  All options granted hereunder and held by
non-employee  directors as of the date of cessation of service as a director may
be exercised by the non-employee  director or his heirs or legal representatives
until  the  earlier  of the  tenth  anniversary  of the  date  of  grant  or the
expiration of twelve months after the date of cessation of such service.

     12. Manner of Exercise.  All or a portion of an exercisable option shall be
deemed  exercised upon delivery to the Secretary of the Company at the Company's
principal  office  all  of the  following:  (i) a  written  notice  of  exercise
specifying  the  number  of shares to be  purchased  signed by the  non-employee
director or other person then entitled to exercise the option, (ii) full payment
of the exercise  price for such shares by any of the  following  or  combination
thereof (a) cash,  (b) certified or cashier's  check payable to the order of the

                                       2
<PAGE>

Company, (c) the delivery of whole shares of the Company's Common Stock owned by
the option holder,  or (d) by requesting that the Company  withhold whole shares
of Company  Common Stock then issuable upon exercise of the option (for purposes
of such a transaction the value of shares of the Company's Common Stock shall be
defined  as  in  the  first   paragraph   of  Section  7  hereof),   (iii)  such
representations  and  documents  as the  Board,  in its sole  discretion,  deems
necessary or advisable to effect  compliance  with all applicable  provisions of
the  Securities  Act of  1933,  as  amended,  and any  other  federal  or  state
securities  laws or  regulations,  (iv) in the event  that the  option  shall be
exercised  by any  person  or  persons  other  than the  non-employee  director,
appropriate proof of the right of such person or persons to exercise the option,
and (v) such representations and documents as the Board, in its sole discretion,
deems necessary or advisable.

     13.  Compliance with Law. Common Stock shall not be issued upon exercise of
an option  granted  under this  Director  Plan unless and until  counsel for the
Company shall be satisfied  that any  conditions  necessary for such issuance to
comply with applicable federal,  state or local tax, securities or other laws or
rules or applicable securities exchange requirements have been fulfilled.

                                       3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]