SEPARATION AGREEMENT AND RELEASE
EXHIBIT
10.36
THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is entered into by Xxxx X. Xxxxxx
(hereinafter referred to as “Employee”) and Pyramid Breweries Inc., its affiliates, officers,
directors and managers (hereinafter referred to as “Pyramid”).
RECITALS
A. Employee has been employed by Pyramid in the position of President and Chief Executive
Officer, and Employee’s employment at Pyramid will terminate effective June 30, 2006 (the
“Termination Date”).
B. Employee and Pyramid are parties to that certain Employment Agreement dated as of July 15,
2004 (the “Employment Agreement”). This Agreement is entered into pursuant to Section 12(a)(i) of
the Employment Agreement.
C. Each of the undersigned parties to this Agreement has had ample opportunity to review the
facts and law relevant to this issue, has consulted fully and freely with competent counsel of its
choice if desired, and has entered this Agreement knowingly and intelligently without duress or
coercion from any source. Employee has had a reasonable time in which to consider whether he
wished to sign this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises contained
below, it is agreed as follows:
1. EMPLOYMENT: ENDING DATE AND RESPONSIBILITIES
Employee’s employment with Pyramid will end effective as of June 30, 2006. Effective that
date, he has no further employment duties to Pyramid other than those duties which survive his
separation from employment under the confidentiality, unfair competition and nonraiding of
employees provisions in Paragraphs 13 and 15 of the Employment Agreement.
2. CONSIDERATION
In exchange for the promises contained in Paragraph 3 below, Pyramid will provide Employee
with the payments and benefits provided under the Employment Agreement:
(a) Employee’s salary (less customary withholdings for taxes and health benefits), car
allowance, and medical, dental and eye coverage (“health benefits”) through July 14, 2006 (pursuant
to Section 12(a)(ii) of the Employment Agreement;
(b) One year’s salary ($260,000), less customary withholdings for taxes and health benefits,
for the period from July 15, 2006 through July 15, 2007 (pursuant to Section 12(a)(i) of the
Employment Agreement);
(c) 35,000 shares of Pyramid’s common stock (pursuant to Section 5(c)(i) and (ii) of the
Employment Agreement); and
(d) Continuation, at Pyramid’s cost, of Pyramid’s health benefits, including medical, dental
and eye care, to Employee and his qualifying family members through July 15, 2007, with continuing
COBRA eligibility thereafter.
In addition, Pyramid acknowledges and agrees that the forfeiture restrictions contemplated in
Section 5(c) of the Employment Agreement shall not apply to the 35,000 shares referred to in
Section 2(c) above and shall lapse with respect to the 70,000 shares of Pyramid common stock that
were granted to Employee under Section 5(c) of the Employment Agreement as of January 1, 2006 (the
“2006 Shares”). Pyramid agrees to promptly issue, or cause to be issued, the shares referred to in
Section 2(c) above and to reissue, or cause to be reissued, the 2006 Shares without the legends
relating to forfeiture restrictions that were contained on the certificates evidencing such shares.
In addition to the compensation referred to above, Employee shall be entitled to (i) payment
for Employee’s earned but unused vacation through July 14, 2006, less customary tax and other
withholdings, and (ii) Employee’s 2005 bonus pursuant to the Officer Incentive Compensation Plan
(“2005 OICP”) in the amount of $87,164, less customary tax and other withholdings.
As contemplated in the Company’s 2006 Officer Incentive Compensation Plan (“2006 OICP”), if
the performance goals under the 2006 OICP relating to the incentive compensation of the CEO (“CEO
Bonus”) are actually achieved for 2006, Employee shall be entitled to one-half of the CEO Bonus,
payable at the same time as bonuses to other management employees are made under the 2006 OICP.
Pyramid shall not amend the 2006 OICP in a manner which adversely affects the Employee without the
Employee’s prior written consent.
Employee shall be entitled to retain the Pyramid laptop computer and cell phone previously
used by Employee in the course of his employment, along with continued rights to use the cell
telephone number, with Employee bearing all related expenses after July 14, 2006. Employee
understands and acknowledges that all information and data of any nature whatsoever belonging to
Pyramid or relating to its business shall be removed from the laptop and cell phone and Employee
shall cooperate with Pyramid to ensure that such removal is effected.
Employee and Pyramid agree that the consideration set forth above is the consideration offered
for this release in Paragraph 12 the Employment Agreement, and is not required by Pyramid’s
policies or procedures or by any other preexisting contractual obligation of Pyramid or by any
statute, regulation or ordinance, and is offered by Pyramid solely as consideration for this
Agreement.
3. GENERAL RELEASE OF CLAIMS
Except for claims arising from the provisions of this Agreement, Employee expressly waives any
claims against Pyramid (including, for purposes of this Paragraph 3, all affiliates,
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subsidiaries, officers, directors, managers, employees, agents, assigns and representatives)
and releases Pyramid (including its affiliates, subsidiaries, officers, directors, managers,
employees, agents, assigns and representatives) from any claims, whether known or unknown, which
existed or may have existed at any time up to the date of this Agreement, including claims related
in any way to Employee’s employment with Pyramid or the ending of that relationship. Except as
expressly set forth in this Agreement, this release includes, but is not limited to, any claims for
wages, bonuses, employment benefits, or damages of any kind whatsoever, arising out of any common
law torts, arising out of any contracts, express or implied, any covenant of good faith and fair
dealing, express or implied, any theory of wrongful discharge, any theory of negligence, any theory
of retaliation, any theory of discrimination or harassment in any form, any legal restriction on
Pyramid’s right to terminate employees, or any federal, state, or other governmental statute,
executive order, or ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964 as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
Americans with Disabilities Act, the Age Discrimination in Employment Act (ADEA), the Older Workers
Benefit Protection Act, the Family and Medical Leave Act, the Employee Retirement Income Security
Act, the Washington Law Against Discrimination, or any other legal limitation on or regulation of
the employment relationship. The waiver and release of claims under the ADEA contained in this
Agreement does not cover rights or claims that may arise after the date on which Employee signs
this Agreement. Employee hereby acknowledges and agrees that his knowing and voluntary waiver and
release of his rights and claims in exchange for consideration (something of value) that is in
addition to anything of value to which he is already entitled.
In exchange for the foregoing release by Employee, Pyramid hereby releases and forever
discharges Employee and his marital community from and against any and all claims, demands or
causes of action of any nature whatsoever, whether known or unknown, arising from or in any way
connected with Employee’s relationship with Pyramid whether based in tort, contract, or any
federal, state or local law, statute or regulation, arising through the date of this Agreement;
provided, however, that the foregoing shall not release Employee from any obligations assumed or
reaffirmed under this Agreement or for any willful misconduct or fraud of Employee.
The parties represent and warrant that each is the sole owner of the actual or alleged claims,
rights, causes of action, and other matters which are released herein, that the same have not been
assigned, transferred, or disposed of in fact, by operation of law, or in any manner, and that such
party has the full right and power to grant, execute and deliver the releases, undertakings, and
agreements contained herein.
4. NO ADMISSION OF WRONGDOING
This Agreement shall not be construed as an admission by either party of any wrongful act,
unlawful discrimination, or breach of contract, and each party specifically disclaims any liability
to or discrimination against Pyramid, Employee or any other person.
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5. CONFIDENTIALITY OF SEPARATION AGREEMENT/NONDISPARAGEMENT
The parties agree that they will keep the terms of this Agreement (including, but not limited
to, the payments pursuant to Paragraph 2) completely confidential, and that neither party will
disclose any information concerning this Agreement or its terms to anyone other than Employee’s
spouse or domestic partner, the parties’ respective legal counsel, tax advisors, accountants and/or
financial advisors, who will be informed of and bound by this confidentiality clause, within
Pyramid’s senior management and except as required by court order or by applicable law (including
federal securities laws and regulations). In the event either party is requested, by court order
or any other legal process, to provide information covered by this confidentiality obligation, that
party agrees to immediately notify the other party of any such request.
The parties agree that neither party shall make disparaging remarks with regard to the other
party.
6. REAFFIRMATION OF CONFIDENTIALITY, UNFAIR COMPETITION AND NONRAIDING OF
EMPLOYEES AGREEMENTS
Employee expressly reaffirms and incorporates herein as part of this Agreement the
post-employment provisions of the confidentiality, unfair competition and nonraiding of employees
provisions in Paragraphs 13 and 15 of the Employment Agreement, a copy of which was given to
Employee, and which provisions shall remain in full effect.
7. SEVERABILITY
The provisions of this Agreement are severable, and if any part of it is found to be unlawful
or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable
to the maximum extent consistent with applicable law.
8. ENTIRE AGREEMENT
This Agreement, and the Employment Agreement that is incorporated herein by reference, sets
forth the entire understanding between Employee and Pyramid and supersedes any prior agreements or
understandings, express or implied, pertaining to the terms of Employee’s employment with Pyramid
and the employment relationship. Each party acknowledges that in executing this Agreement, such
party does not rely upon any representation or statement by the other party or its or his
representatives concerning the subject matter of this Agreement, except as expressly set forth in
the text of the Agreement. No modification or waiver of this Agreement will be effective unless
evidenced in a writing signed by both parties.
9. GOVERNING LAW
This Agreement will be governed by and construed exclusively in accordance with the laws of
the State of Washington without reference to its choice of law principles. Any
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disputes arising under this Agreement shall be brought in a court of competent jurisdiction in
the State of Washington.
10. KNOWING AND VOLUNTARY AGREEMENT
Employee agrees that Employee has carefully read and fully understands all aspects of this
Agreement including the fact that this Agreement releases any claims that Employee might have
against Pyramid, except for specifically reserved rights and claims, as provided herein. Employee
agrees that Employee has been advised to consult with an attorney prior to executing the Agreement,
and that Employee has either done so or knowingly waived the right to do so, and now enters into
this Agreement without duress or coercion from any source. Employee agrees that he has been
provided the opportunity to consider for twenty-one (21) days whether to enter into this Agreement,
and has voluntarily chosen to enter into it on this date. Employee may revoke this Agreement for a
period of seven (7) days following the execution of this Agreement; this Agreement shall become
effective following expiration of this seven (7) day period.
11. RESIGNATION FROM PYRAMID BOARD; INDEMNIFICATION
Employee hereby resigns from the Board of Directors of Pyramid, effective as of June 30, 2006.
Nothing herein shall affect any right to defense or indemnification or advancement of expenses to
which Employee is entitled to in connection with his role as an employee, agent, director or
officer of Pyramid, whether pursuant to the Washington Business Corporation Act, Pyramid’s articles
of incorporation or bylaws, or contract, including his Employment Agreement or any policy of
insurance.
12. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which together shall for
all purposes constitute one agreement, binding on all the parties, notwithstanding that all the
parties have not signed the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below.
| Pyramid Breweries, Inc. | EMPLOYEE | |||||
By:
|
/s/ Xxxxxx Xxxxxxx | /s/ Xxxx X. Xxxxxx | ||||
Its:
|
Chairman | |||||
| Dated: July 3, 2006 | Dated: July 3, 2006 | |||||
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