May 26, 2010 Kurt R. Widmer Craft Brewers Alliance, Inc. 929 North Russell Street Portland, OR 97227 Dear Kurt:
Exhibit 10.1
May 26, 2010
Dear Xxxx:
The purpose of this letter is to set forth our understanding about your continued employment
as Chairman of the Board of Craft Brewers Alliance, Inc. (the “Company”). Effective as of July 1,
2010, this letter supersedes and replaces any agreement regarding your employment by the Company,
including, without limitation, your Employment Agreement dated June 30, 2008; provided, however,
that this letter does not supersede or replace your Non-Competition/Non-Solicitation Agreement with
the Company dated June 30, 2008.
Your employment is “at-will,” which means you or the Company may end the employment
relationship at any time. Our mutual agreement regarding your salary, severance, and other
benefits and obligations is set forth below.
Compensation and Benefits
Your base salary for the six-month period ending December 31, 2010, will be $115,875, and for
the 12-month period ending December 31, 2011, will be $200,000 (in all cases before standard tax
withholdings and other payroll deductions). Your base salary level will be reviewed annually for
adjustment beginning January 1, 2012, by the Compensation Committee. In addition, you are entitled
to participate in all of the Company’s employee benefit programs for which you are eligible,
including long-term incentive awards approved by the Compensation Committee for key employees from
time to time.
Bonus
For the balance of 2010, you will be eligible for a target bonus of $25,000, and for 2011 you
will be eligible for a target bonus of $75,000, in each case conditioned upon achieving such
corporate or individual performance goals as may be approved by the Compensation Committee or Board
of Directors.
Xxxx X. Xxxxxx
May 26, 2010
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May 26, 2010
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Thereafter, you will be eligible for a yearly bonus, in an amount to be approved by the
Compensation Committee. All or a portion of such bonus may be conditioned upon achieving certain
performance targets approved by the Compensation Committee or Board of Directors.
Severance
In the event that your employment with the Company is terminated by the Company for any reason
other than “for cause” or by you due to “good reason,” the Company will continue to pay your
monthly base salary at the rate in effect on the date of termination in accordance with the
Company’s normal payroll schedule commencing on the day following termination and extending for a
period (the “Severance Period”) of 12 months.
In addition, the Company will promptly (in no event later than March 15 of the calendar year
after the year in which your employment terminated) make a cash payment to you in an amount equal
to 100% of your unused Paid Time Off (“PTO”) hours accrued through the date of termination in
accordance with the provisions of the Company’s PTO Plan then in effect.
If you become entitled to severance benefits under this agreement, the Company will also
continue to provide you during the Severance Period the same health benefits as were being provided
to you at the time of termination; provided, however, that such benefits shall terminate in the
event you find new employment with comparable health coverage.
For purposes of this letter, “for cause” means that you have engaged in conduct which has
substantially and adversely impaired the interests of the Company, or would be likely to do so if
you were to remain employed by the Company; you have engaged in fraud, dishonesty or self-dealing
relating to or arising out of your employment with the Company; you have violated any criminal law
relating to your employment or to the Company; you have engaged in conduct which constitutes a
material violation of a significant Company policy or the Company’s Code of Conduct and Ethics,
including, without limitation, violation of policies relating to discrimination, harassment, use of
drugs and alcohol, and workplace violence; or you have repeatedly refused to obey lawful directions
of the Company’s Board of Directors.
For purposes of this letter, “good reason” means the occurrence of one or more of the
following events without your consent: (a) a material reduction in your authority, duties, or
responsibilities as the Company’s Chairman of the Board; (b) a material reduction in the authority,
duties, or responsibilities of the person or persons to whom you report (including, if applicable,
a requirement that you report to a Company officer or employee instead of reporting directly to the
Company’s Board of Directors); or (c) a relocation of your principal office to a location that is
more than 100 miles from Portland, Oregon; provided, however, that “good reason”
shall only be deemed to have occurred if: (i) within 90 days after the initial existence of the
circumstances constituting “good reason,” you provide the Company with a written notice describing
such circumstances, (ii) the Company fails to cure the circumstances within 30 days after the
Company receives your notice, and (iii) you terminate your employment with the Company and all the
members of the Company’s controlled group within 90 days of the date of your notice.
Xxxx X. Xxxxxx
May 26, 2010
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May 26, 2010
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For purposes of this letter, a termination of your employment will be deemed to occur only
when or if there has been a “separation from service” as such term is defined in Treasury
Regulation Section 1.409A-1(h).
If, during the Severance Period, you become employed or associated with a brewing or other
company that the Company determines, in its reasonable discretion, is a competitor of the Company
or the portion of Anheuser-Xxxxx, Inc.’s business relating to alcoholic beverages, your severance
payments and benefits under this letter agreement will terminate as of the effective date of such
employment or association. This is in addition to, and not in place of, the restrictions set forth
in your Non-Competition Agreement/Non-Solicitation Agreement with the Company.
The total amount of severance payments and other benefits (except benefits described in
Treasury Regulation Sections 1.409A-1(a)(5) or 1.409A-(b)(9)(v)) provided to you pursuant to this
letter agreement shall not exceed two times the lesser of (i) the sum of your annualized
compensation based upon your annual salary in the year preceding the year in which your employment
is terminated (adjusted for any increase during that year that was expected to continue
indefinitely if your employment had not terminated) or (ii) the applicable dollar limit under
Section 401(a)(17) of the Internal Revenue Code for the calendar year in which your employment is
terminated.
The severance payments and other benefits under this letter are intended to be exempt from the
requirements of Section 409A of the Internal Revenue Code by reason of all payments under this
Agreement being either “short-term deferrals” within the meaning of Treasury Regulation
Section 1.409A-1(b)(4) or separation pay due to involuntary separation from service under Treasury
Regulation Section 1.409A-1(b)(9)(iii). All provisions of this letter shall be interpreted in a
manner consistent with preserving these exemptions.
The Company will require you to execute an appropriate general release of claims that you may
have relating to your employment at the Company and termination of your employment as a condition
to your receipt of severance payments or other benefits other than those required by law or
provided to employees generally. If such general release of claims is not executed within 30 days
following the date your employment with the Company is terminated, all severance payments and other
benefits payable after such 30-day period will be forfeited, and you agree to repay any severance
payments, and the value of any other benefits, paid to you during such period.
Code of Conduct
By your signature below, you agree to comply with the Company’s Code of Conduct and Ethics as
in effect from time to time, and to be subject to the Company’s policies and procedures in effect
from time to time for directors and employees of the Company.
Xxxx X. Xxxxxx
May 26, 2010
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May 26, 2010
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We appreciate your continued efforts on behalf of the Company, and look forward to working
with you for years to come.
| Sincerely, | ||||
| /s/ Xxxxx Xxxx |
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| Xxxxx Xxxx | ||||
| Chairman of Compensation Committee of Board of Directors |
Acknowledged and Agreed: |
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/s/ Xxxx X. Xxxxxx
|
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Xxxx X. Xxxxxx |
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Date: July 8, 2010 |
