Exhibit 10.1 Amended and Restated Employment Agreement between Redhook Ale
Brewery, Incorporated and Xxxx X. Xxxxxxx, dated February 13, 2008
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"), dated
February 13, 2008, amends and restates that Employment Agreement dated November
19, 2007 (the "Original Agreement"), between Redhook Ale Brewery, Incorporated
("Employer" and, also, "Company") and Xxxx X. 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 and Chief Executive Officer of Employer.
c. Employer has entered into an Agreement and Plan of Merger with
Xxxxxx Brothers Brewing Company, and intends to appoint Employee as Chairman
Emeritus and Consultant to the Board of Directors of Employer as of the
effective date ("Effective Date") of the merger if the merger is approved by the
shareholders of each company.
d. Employee accepts such continued employment with Employer and agrees
to render the services for Employer on the terms and conditions set forth in
this Agreement.
e. The Effective Date of the merger having been delayed to July 1,
2008, or later, the parties desire to clarify the provisions of the Original
Agreement relating to Employee's stock options.
2. Term of Employment. The term of this Agreement commences on the
Effective Date and, subject to the further provisions of this Agreement, ends on
the last day of the month in which the first anniversary of the Effective Date
occurs ("Termination Date").
3 Employment Terms
a. Until the Effective Date, Employee will continue as Chief Executive
Officer of Employer under the terms of his present letter agreement with the
Employer, at his present level of compensation.
b. On the Effective Date, Employee's employment as Chief Executive
shall terminate and Employee shall receive all bonuses due under his present
employment agreement, pro-rated up to and including the Effective Date , and
shall receive his accrued vacation and sick leave pay. The remaining provisions
of this Agreement will apply from and after the Effective Date. As of the
Effective Date, Employer employs Employee as Consultant to the Board with the
title Chairman Emeritus, and, and Employee agrees to render such consulting
services commencing with the Effective date for and on behalf of Employer under
the direction and supervision of the Board of Directors. Employer shall give
Employee reasonable notice of the times his presence in the Portland or Seattle
offices of the Company is needed for consultation, and Employee shall make
himself reasonably available for phone consultation while he is not on vacation
or traveling on other business. Employee shall provide these services
professionally and competently between the Effective Date and the Termination
Date, with the total number of days devoted to Employer not to exceed 180.
4. Compensation.
a. Employer will pay Employee, as compensation for services rendered
under this Agreement as Chairman Emeritus and Consultant a minimum base salary
of Ninety Thousand and no/100 Dollars ($90,000) per year in accordance with
Employer's normal payroll policies; and, in the event Employee is called on to
render services during this period in excess of 180 days, Employee shall receive
compensation at the rate of $500 per day; and
b. Employee will be reimbursed for all business expenses related to
travel to Portland, Oregon on Employer's business, including lodging and a
mileage allowance if Employee is traveling in his own automobile.
c. From and after the Termination Date Employer shall pay Employee,
for two (2) additional years the salary in effect as of the date this Agreement,
which is Two Hundred Sixty Seven Thousand Eight Hundred and 16/100 Dollars
($267,800.16) (hereafter, the "Current Salary"). The Current Salary shall be
paid in accordance with standard payroll policies. On the Termination Date,
Employer shall pay any accrued vacation and sick leave pay. In addition,
Employer shall pay the monthly premium for continuation (COBRA) coverage under
Employer's health care plans for Employee for a period of 18 months following
the Termination Date, if Employee properly and timely elects such coverage as
provided for in Employer's COBRA notice materials, except that such payments
shall end earlier if Employee becomes eligible to participate in the group
health plan of a subsequent employer. Employee agrees to notify Employer as soon
as possible if Employee becomes eligible to participate in a group health plan
of a subsequent employer within 18 months of the effective date of termination
5. Vacations and Fringe Benefits. Employer shall provide Employee four (4)
weeks vacation, retirement and other fringe benefits provided other similarly
situated executive employees of Employer in accordance with the terms and
conditions of such benefit plans and programs as they may be amended from time
to time.
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6. Early 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 engages in fraud, dishonesty or self-dealing relating to
or arising out of his employment; or
(4) Employee violates any criminal law relating to his employment or
to the Company; or
(5) Employee repeatedly refuses to obey lawful directions of
Employer's Chief Executive Officer or Board of Directors.
b. Employer may at its option terminate the employment of Employee
through written notice to Employee for any other reason or for no reason;
however, in the event of such termination:
(1) Employer shall pay the two years Current Salary, accrued vacation
and sick leave pay, and premiums for COBRA coverage in accordance with
section 4(c), above.
(2) Employee will be entitled to receive the payments and benefits
described in this paragraph 6(b), if and only if Employee signs a valid
general release of all claims against the Company in a form provided by the
Company.
(3) If Employee violates Sections 7 or 8 of this Agreement, Employer's
obligation to continue to provide the payments and benefits, 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 payments and benefits under Section 6(b) 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:
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(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; or
(4) At any time after the first anniversary of the Effective Date,,
without cause, provided Employee has given Employer thirty (30) days prior
written notice.
d. In the event that Employee elects to terminate his employment under
Section 6(c):
(1) Employer shall pay Employee the two years Current Salary, accrued
vacation and sick leave pay; and premiums for COBRA coverage in accordance
with Section 4(c), above.
(2) Employee will be entitled to receive the payments and benefits
described in this paragraph 6(d) if and only if Employee signs a valid
general release of all claims against the Company in a form provided by the
Company;
(3) 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)(5) 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.
g. If Employee's employment has been terminated under 6b or 6c,
Employer will indemnify Employee for third party claims against Employee
relating to his employment to the same extent Employee would have been
indemnified by Employer had he been employed under this Agreement.
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7. Confidential Information and Goodwill.
a. Employee has acquired and 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 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 in hard copy or electronic form 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 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; Consulting Agreement; Extension of Options.
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 while employed by Employer and for a period of three (3)
years following the termination of his Employment, whether under Section 2 or
Section 6, Employee will not, unless given prior written consent by Employer:
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(1) directly or indirectly solicit, induce, influence or attempt to
solicit, induce or influence any person or entity who was employed by
Employer during the same time as Employee to end or modify his/her
employment relationship with Employer, or to work for Employee or any other
entity (this means, among other things that Employee will not recruit or
hire any of Employer's employees, or identify such people to any third
party as a potential candidate for employment or contractor relationship).
Employee will not directly or indirectly persuade or attempt to persuade
any customer, supplier, distributor, retailer, person or entity which does
business with Employer during the time of Employee's employment with
Employer, to discontinue or modify its existing business relationship with
Employer and 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 craft 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(c)(1) - (3), above, and provided
further that if this Subsection does apply, it shall not prevent Employee
from providing consulting services relating to the Canadian market to
Canadian business entities.
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. Employee agrees that for a period of three (3) years following
termination of his employment, he shall make himself available in person or by
telephone conference for consultation with Employer's principal managers and its
Board of Directors (the "Consulting Agreement"). Such consultation shall be on
an "as needed" basis, following reasonable notice to Employee, and reasonably
subject to Employee's travel and work schedule post employment. Employee shall
receive compensation at the rate of $500 per day of consulting and travel time
devoted to the services by Employee.
d. 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 limit the damages available to the Employer upon
violation by Employee of Sections 7 or 8 of this Agreement.
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e. Employee and Employer acknowledge that this Agreement does not
amend or modify his outstanding option agreements, and that his outstanding
option agreements, if not earlier exercised, must be exercised on the earlier of
(i) the latest date upon which the respective option agreements could expire by
their original terms under any circumstances, notwithstanding anything to the
contrary in the agreements evidencing such options or (ii) the dates that are
three months after the termination of Employee's employment, for Option
Agreements ISO-92687, dated May 20,1999, and ISO-92822, dated August 3, 2001,
and three months after termination of Employee's Consulting Agreement for
OPO20011, dated August 27, 2002 (or, for each option agreement, six months after
the date of death or disability if such termination occurs on account of
Employee's death or disability).
9. Employee's Death or Disability. Employee's employment pursuant to this
Agreement shall terminate automatically on the date of Employee's death or
disability. In that event, Employer shall pay to Employee or to Employee's
estate or legal guardian, as applicable, Employee's base pay as of the date of
termination for a period of two years following such termination, plus accrued
vacation pay, plus Employee's bonus calculated and paid in accordance with the
respective formula set forth on Schedule A and pro-rated to the date of
termination. For purposes of this Agreement, Employee shall be deemed to be
disabled (as medically determined by an independent physician) if, for a period
of at least six (6) consecutive months he is unable to perform the essential
functions of his position with or without reasonable accommodation. For purposes
of this Agreement, if Employee's employment terminates by reason of his
disability, his employment termination date shall be deemed to be the last day
of the six (b) month period described above. 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 second anniversary of the date Employee's
employment terminated, whereupon Employer's obligation to pay compensation under
Section 6 shall cease. In addition, vested and unexercised options held by
Employee shall be exercisable for a period of one year from the date of
Employee's death or termination of employment by disability. 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
00000 XX 000xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
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and if to Employee to:
Xxxx X. Xxxxxxx
00000 XX 000xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
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 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 employment arbitration rules of
the American Arbitration Association ("AAA") then existing, selected in
accordance with AAA rules. 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.
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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. This Agreement embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior oral and written agreements and understandings between Employer and
Employee with respect to the subject matter hereof. 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.
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.
g. Each provision of this Agreement shall be interpreted where
possible in a manner necessary to sustain its legality and enforceability. If
any provision of this Agreement shall be unenforceable or invalid under
applicable law, such provision shall be limited to the minimum extent necessary
to render the same enforceable or valid. The unenforceability of any provision
of this Agreement in a specific situation, or the unenforceability of any
portion of any provision of this Agreement in a specific situation, shall not
affect the enforceability of (i) that provision or portion of provision in
another situation or (ii) the other provisions or portions of provisions of this
Agreement if such other provisions or the remaining portions could then continue
to conform with the purposes of this Agreement and the terms and requirements of
applicable law.
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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/ Xxxxx X. Xxxxxxxxx Date: 2/13/08
---------------------- ---------
Its President and Chief Operating Officer
-----------------------------------------
"EMPLOYEE"
By /s/ Xxxx X. Xxxxxxx Date: Feb 13 `08
------------------- ------------
Xxxx X. Xxxxxxx
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SCHEDULE A
Annual Bonus Plan for 2007
--------------------------
A. General. The components of the annual bonus award will be based on
meeting bonus goals for the year, as described below, with the portion
achievable for each bonus component being computed or awarded as described
below. The bonus earned will be paid within twenty-one (21) days after the
audited financial statements for the company have been submitted by the
Auditors.
B. Year 2007. Except as noted, for 2007 the bonus components will be paid
for the Company's achieving or exceeding the following goals ("Budget"
references are to the 2007 Company Budget approved as by the Board):
Non-Discretionary Goals Award
1. Attain budgeted EBITDA $50,000
2. Attain at least 4% growth in Net Contribution from $25,000
Woodinville retail sales
3. Attain at least 4% growth in EBITDA from East Coast $25,000
Operations.
Discretionary Goals
1 Make significant progress in new business in any or $10,000
all of the following areas: Canadian sales and/or
licences; alliance partnerships with other micro/craft
brewers on contract brewing, license and/or investment
2 Continue to develop IPA as a growth product while $10,000
managing ESB for maturity, all to the benefit of
Redhook's EBITDA
C. Year 2008. For 2008, the bonus components will be established by the
Compensation Committee during the first calendar quarter of the year and shall
consist of Non-Discretionary Goal Components totaling $100,000 and Discretionary
Goal Components totaling $20,000.
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