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Exhibit 10.43
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective the
1st day of November, 2001, between Redhook Ale Brewery, Incorporated
("Employer") and Xxxx Xxxxxxx ("Employee").
1. Explanatory Statement
a. Employer is engaged in the business of brewing, packaging,
marketing, and distributing alcoholic malt beverages and other beverages.
b. Employee has specialized expertise in the business of
brewing, packaging, marketing, and distributing alcoholic malt beverages, and
other beverages and is the Chairman of the Board, Chief Executive Officer and
President of Employer.
c. Employee accepts continued employment with Employer and
agrees to render the services for Employer on the terms and conditions set forth
in this Agreement.
2. Term of Employment. The term of this Agreement commences on November
1, 2001 and, subject to the further provisions of this Agreement, ends on July
31, 2005.
3. Employment. Employer employs Employee as Chairman of the Board, Chief
Executive Officer and President, and Employee agrees to render services for and
on behalf of Employer under the direction and supervision of the Board of
Directors. Employee shall provide these services professionally and competently
and shall devote substantially all of Employee's business time to his services
hereunder.
4. Compensation.
a. Employer will pay Employee as compensation for services
rendered under this Agreement as follows:
(i) a minimum base salary of Two Hundred Thirty Seven Thousand
Five Hundred Dollars ($237,500) per year in accordance with Employer's normal
payroll policies; and
(ii) bonuses to be determined and paid as set forth on Schedule
A attached hereto.
b. Employee's base salary and incentive compensation shall be
reviewed annually by the Compensation Committee. The Company intends to increase
Employee's base salary and target bonus annually, (and will not unreasonably
withhold increases) if the Company is meeting or exceeding targeted performance,
and Employee is meeting or exceeding agreed upon objectives. Employee agrees and
acknowledges that, in determining whether to increase base salary or incentive
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compensation, the Compensation Committee is required to take into account the
financial condition of the Company, and its short and long term prospects.
5. Vacations and Fringe Benefits.
a. Employer shall provide Employee four (4) weeks vacation,
retirement and other fringe benefits provided other similarly situated executive
employees of Employer.
b. Employer may furnish Employee an automobile, which may be
used by Employee for personal and business use and shall pay the ordinary and
reasonable expenses associated with operation of the automobile; however,
Employee shall account to Employer for the personal use of the automobile which
in turn shall be reported by Employer as income to Employee in accordance with
the regulations of the Internal Revenue Service. If at any time the rules
regarding personal use of business automobiles are changed by the Internal
Revenue Service, this Agreement shall be modified to assure compliance in a
manner that is as favorable to Employee as permitted by such rules. If Employer
does not provide an automobile for Employee, Employee will receive a reasonable
monthly car allowance in an amount to be determined by the Compensation
Committee.
6. Termination of Employment.
a. Employer may at its option terminate the employment of
Employee with no further obligation to compensate Employee through written
notice to Employee for any of the following reasons:
(1) Employee materially breaches any of the provisions
of this Agreement and fails to cure the breach within thirty (30) days
after receiving specific written notice of the breach; or
(2) Employee has engaged in conduct which in the event
he were to remain employed by Employer would substantially and adversely
impair the interests of Employer; or
(3) Employee repeatedly refuses to obey lawful
directions of Employer's Board of Directors.
b. Employer may at its option terminate the employment of
Employee through written notice to Employee for any other reason; however, in
the event of such termination:
(1) Employer shall pay employee all bonuses calculated
in accordance with the respective formula set-forth on Schedule A,
pro-rated up to and including the effective date of termination;
(2) Employer shall continue to pay Employee for a
minimum of two (2) additional years the salary and benefits then in
effect on the date that
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notice of termination is received (such compensation to be paid in
accordance with standard payroll policies, or in a lump sum within 30
days of termination, at Employees option), provided, that if Employee
has not obtained employment within such two (2) year period, Employee
shall be entitled to the health benefits provided other similarly
situated executive employees of Employer for an additional three (3)
months, and at the conclusion of the three month period, Employee shall
be entitled to the COBRA benefits provided other similarly situated
executive employees for an additional six (6) months;
(3) All outstanding unvested options/shares granted to
the Employee that are scheduled to vest within two (2) year from the
date that notice of termination is received under this Section 6.b.,
will continue to vest according to that schedule and all other unvested
options/shares will be canceled;
(4) If Employee violates Sections 7 or 8 of this
Agreement, Employer's obligation to continue to pay Employee's
compensation, as described in this Section 6.b., shall immediately
terminate, and the Employer will have no further obligation to Employee
pursuant to this Agreement, provided that the cessation of the
Employee's compensation under this Section 6.b.(4) shall not limit
Employer's rights to pursue other remedies at law or in equity.
c. Employee may at his option terminate his employment with
Employer under this Agreement through written notice to Employer for the
following reasons:
(1) Employer materially breaches any of the provisions
of this Agreement and fails to cure the breach within thirty (30) days
after receiving specific written notice of the breach and action
required to cure the breach;
(2) Employer is declared bankrupt or a receiver is
appointed.
(3) Employer liquidates or otherwise ceases business
operations;
d. In the event that Employee elects to terminate his employment
under Section 6.c.(1)
(1) Employer shall pay Employee all bonuses calculated
in accordance with the respective formula set-forth on Schedule A,
pro-rated up to and including the effective date of termination
(2) Employer shall continue to pay Employee for two (2)
additional years the compensation, other than the annual performance
bonus, then in effect on the date that notice of termination is
received;
(3) All outstanding unvested options/shares granted to
the Employee that are scheduled to vest within two (2) year from the
date that notice
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of termination is received under this Section 6.d., will continue to
vest according to that schedule and all other unvested options/shares
will be canceled;
(4) If Employee materially violates Sections 7 or 8 of
this Agreement, Employer's obligation to continue to pay Employee's
compensation, as described in this Section 6.d., shall immediately
terminate, and the Employer will have no further obligation to Employee
pursuant to this Agreement, provided that the cessation of Employee's
compensation under this Section 6.d.(4) shall not limit Employer's
rights to pursue other remedies at law or in equity.
e. Employee's termination of employment for any other reason
shall constitute a material breach of this Agreement, and shall terminate
Employer's obligations under this Agreement, without limiting Employer's rights
to pursue other remedies at law or in equity; and
f. Employee shall continue to be subject to the restrictions in
Sections 7 and 8 of this Agreement following termination of employment for any
reason.
7. Confidential Information and Goodwill.
a. Employee will acquire knowledge of Employer's confidential
information. Confidential information is information which is of a unique nature
relating to the Employer's business operations, internal structure, financial
affairs, programs, recipes, formulations, brewing methods, systems, procedures,
manuals, confidential reports, lists of customers and prospective customers,
sales and marketing methods, as well as the amount, nature and type of product,
equipment and methods used and preferred by Employer's customers and the prices
paid by Employer's customers or any other information which is confidential or
proprietary or otherwise not available to the general public. Disclosure of
material confidential information could cause substantial loss to the Employer.
Employee agrees that Employee will not for any purpose disclose any confidential
information obtained by Employee during employment with the Employer to any
person or entity.
b. Employee may have access to records of the Employer. Records
are all contracts, agreements, financial books, instruments and documents,
client lists, memoranda, data, reports, recipes, formulations, brewing records,
tapes, rolodexes, telephone and address books, letters, research, card decks,
listings, programming, and any other instruments, records or documents relating
or pertaining to manufacturing or customer sales by Employer or Employee, the
services rendered by Employee, or the business of the Employer. Records will
remain in Employer's property. When Employee's employment terminates, Employee
will return to Employer all records and will neither make nor retain any copies
of any records after termination of employment.
c. During the term of this Agreement and thereafter, Employee
shall diligently, legally and freely perform his duties as set forth in this
Agreement and shall take no action that would materially damage the goodwill of
the Employer. During the term of this Agreement and thereafter, Employee agrees
that he will not make any oral
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or written statement to any third party that is intended to, or does, call into
question the (1) conduct, business practices or business judgment of the
Employer or any of its officers, directors or business partners; or (2) quality
of the Employer's products or services.
8. Restrictive Covenants.
a. Employee will perform services which have a unique value to
Employer which if used in competition with Employer could cause serious and
irreparable harm to Employer. Employee will develop goodwill for Employer
through personal contact with customers and others who have business
relationships with Employer. This goodwill, which is a proprietary asset of
Employer, may follow Employee after the employment with Employer terminates.
Employee agrees that for a period of two (2) years following the termination of
this Agreement, Employee will not, unless given prior written consent by
Employer:
(1) solicit for employment or employ any other person or
entity any person who is employed by Employer during the same time as
Employee. Employee will not persuade or attempt to persuade any
customer, supplier, distributor, retailer, person or entity which is a
customer or supplier to Employer during the time of Employee's
employment with Employer, to discontinue business with Employer and its
affiliates or modify the terms of business between itself and Employer
or its affiliates.
(2) engage or act, either as a consultant, independent
contractor, proprietor, partner, employee, officer, or in any other
capacity, in any business which brews, packages, markets or distributes
alcoholic malt beverages in any state of the continental United States
or in any foreign country where Employer brewed, packaged, marketed or
distributed alcoholic malt beverages during the term of this Agreement,
provided however that this Subsection 8(a)(2) shall not apply to
Employee if Employee's employment is terminated pursuant to 6(a), 6(c)
or 6(e), above.
b. If any provision or portion of this section of the Agreement
is held unreasonable, unlawful, or unenforceable by a court of competent
jurisdiction, the provision will be deemed to be modified to the extent
necessary for the provision to be legally enforceable to the fullest extent
permitted by applicable law. Any court of competent jurisdiction may enforce any
provision of this section or modify any provision in order that the provision
will be enforced by the court to the fullest extent permitted by applicable law.
c. Violation by Employee of the provisions of Sections 7 or 8 of
this Agreement could cause irreparable injury to Employer and there is no
adequate remedy at law for violation of those provisions. Employer has, in
addition to other legal or equitable remedies, the right to enjoin Employee in a
court of equity from violating those provisions. The cessation of Employee's
compensation under Section 6 shall in no way
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limit the damages available to the Employer upon violation by Employee of
Sections 7 or 8 of this Agreement.
9. Employee's Death or Disability. In the event that Employee dies or
becomes disabled during the period that Employee is employed by Employer under
this Agreement, Employer shall pay for a period of one (1) year the compensation
including all bonuses calculated in accordance with the respective formula
set-forth on Schedule A and pro-rated up to and then in effect on the date of
Employee's death, or date that notice of Employee's disability is received, to
Employee or to Employee's estate or legal guardian. In the event that Employee
dies within one year after Employee's employment has been terminated pursuant to
Section 6.b. or Section 6.c. Employer shall continue to pay Employee's estate
the compensation, other than the annual performance bonus, then in effect on the
date of Employee's death until the first anniversary of the date Employee's
employment terminated, whereupon Employer's obligation to pay compensation under
Section 6 shall cease. In addition, the options/shares granted to the Employee
that are scheduled to vest during the twelve (12) month period under Section
6.b.(3) and Section 6.d.(3) shall vest immediately and be exercisable for a
period of one year from the date of Employee's death. Employee shall continue to
be subject to the restrictions in Sections 7 and 8 of this Agreement following
termination of employment due to disability.
10. Notices. All notices and other communications required or permitted
to be given by this Agreement must be in writing and must be given and will be
deemed received if and when either hand delivered and a signed receipt is given
or mailed by registered or certified U.S. mail, return receipt requested,
postage prepaid, and if to Employer to:
Secretary of the Board of Directors
Redhook Ale Brewery, Incorporated
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
and if to Employee to:
Xxxx X. Xxxxxxx
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or at any other address as either party notifies the other of in writing.
11. Arbitration.
a. In the event of any dispute between the parties arising out
of or related to the enforcement or interpretation this Agreement or concerning
this Agreement, the subject matter hereof or thereof, the making, performance,
breach or termination of this Agreement or the rights and duties of the parties
in relation hereto or
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thereto, the parties agree that, in lieu of initiating judicial proceedings, the
dispute shall be submitted to and resolved by binding arbitration before a
single arbitrator under the commercial arbitration rules of the American
Arbitration Association ("AAA") then existing, selected in accordance with AAA
rules, with the exception that, to the extent available, such arbitrator must
have worked in the beverage industry for a period of at least two (2) years. The
place of arbitration shall be agreed to by the parties or in the absence of such
agreement shall be King County, Washington. The parties agree that judgment upon
the award may be entered in any court where the arbitration takes place or any
court having jurisdiction. The arbitrator may order specific performance or
other equitable relief or remedies to the extent they deem it appropriate, in
any situation in which a court could so order. Each party hereby waives personal
service of any process in connection with any such action or proceeding and
agrees that the service thereof may be made by certified or registered mail
directed to such party at the address designated below, and shall be deemed
effective as provided in that paragraph, hereof or in any other manner permitted
by law. The decision of the arbitrator shall be final and binding upon the
parties, their successors and assigns, and they shall comply with such decision
in good faith, and each party hereby submits itself to the jurisdiction of the
courts of the place where the arbitration is held, but only for the entry of
judgment with respect to and to enforce the decision of the arbitrators
hereunder, which judgment may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. This provision shall not
preclude the filing of a lawsuit or other judicial action to enable the
recording of a notice of pending action, or for attachment, receivership,
injunction or other provisional remedies. Judgment on the arbitration award may
be entered in any court having jurisdiction over the subject matter of the
controversy.
b. By agreeing to arbitration under this paragraph, both
Employee and Employer understand that they are agreeing to have any dispute
relating to Employee's employment decided by a neutral arbitrator, and as to
those disputes decided by the neutral arbitrator, Employee and Employer FULLY
AND FOREVER WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL OF ANY ACTION OR PROCEEDING
ARISING OUT OF THIS AGREEMENT BY JURY. THIS WAIVER MEANS JUDGMENT MAY BE ENTERED
BY A NEUTRAL ARBITRATOR.
12. Miscellaneous.
a. This Agreement binds and benefits Employer and its successors
and assigns. This Agreement binds and benefits Employee and Employee's heirs,
personal and legal representatives, and guardians. No portion of this Agreement
or interest in it may be assigned by Employee.
b. The terms and provisions of this Agreement may not be
modified except by written instrument duly executed by Employer and Employee.
c. This Agreement will be governed by and enforced and construed
in accordance with the laws of the State of Washington.
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d. In any dispute arising out of this Agreement, the prevailing
party shall be entitled to recover its reasonable attorneys' fees and costs.
e. In the event of a breach of this Agreement, the non-breaching
party may maintain an action for specific performance against the party who is
alleged to have breached any of the terms of the Agreement. This subsection will
not be construed to limit in any manner any other rights or remedies an
aggrieved party may have by virtue of any breach of this Agreement.
f. Each of the parties has the right to waive compliance with
any obligation of this Agreement, but a waiver by any party of any obligation
will not be deemed a waiver of compliance with any other obligation or of its
right to seek redress for any breach of any obligation on any subsequent
occasion, nor will any waiver be deemed effective unless in writing and signed
by the party so waiving.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
"EMPLOYER"
Redhook Ale Brewery, Incorporated
By /s/ Xxxxxx X. Xxxxxx Date: November 3, 2000
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Its Chairman, Compensation Committee
"EMPLOYEE"
By /s/ Xxxx X. Xxxxxxx Date: November 1, 2000
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Xxxx X. Xxxxxxx
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SCHEDULE A
MEASUREMENTS BY EXECUTIVE
TARGETED PAYOUT
XXXX XXXXXXX -- CEO & PRESIDENT
Targeted bonus is $87,500. Of this amount, 50% is discretionary and paid out
quarterly. $10,937.50 per quarter is targeted
Discretionary to be paid out unless, in the opinion of the Compensation
Committee, there is perceived to be a shortfall in the following:
1. General corporate performance as reported in monthly statements,
quarterly financial reports and the various reports which are
generated to measure all executive's performance.
2. Company financial components reflecting trends consistent with
predicted EBITDA improvement.
The non-discretionary portion (50%, or $43,750) is based on the following
formula:
Actual EBITDA improvement divided by projected EBITDA improvement times
$43,750.
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