Exhibit 10.38

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and effective as of December
2, 2019 (the “Effective Date”) by and between Reed’s, Inc., a Delaware
corporation (“Reed’s” or the “Company”), and Thomas J. Spisak (the “Executive”).

 

WHEREAS, Reed’s and the Executive desire to enter into this Agreement to
evidence the terms and conditions of the employment of the Executive by Reed’s.

 

NOW, THEREFORE, intending to be legally bound and in consideration of the mutual
provisions set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

Section 1 Employment. Reed’s hereby employs the Executive and the Executive
hereby accepts such employment, in accordance with the terms and conditions set
forth in this Agreement. Executive hereby represents and warrants to the Company
that (i) the execution, delivery and performance of this Agreement by Executive
does not and will not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which he or she is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity (other than
nondisclosure agreements with Executive’s prior employer(s), the terms of which
he has disclosed to the Company and which he does not expect to materially
interfere with the performance of his obligations hereunder) and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has had the
opportunity to consult with independent legal counsel regarding his or her
rights and obligations under this Agreement and that he or she fully understands
the terms and conditions contained herein.

 

Section 2 Term. The Executive’s employment (the “Term”) with Reed’s under this
Agreement will commence on the Effective Date and continue until terminated in
accordance with Section 6 below. Executive’s employment with the Company shall
be on an “at-will” basis.

 

Section 3 Position. The Executive will be employed as the Chief Financial
Officer (“CFO”) of Reed’s and will report to the Chief Executive Officer. The
Executive will have the duties and responsibilities customarily attendant to the
position of CFO. Executive will also have such other duties and responsibilities
that are commensurate with his position as specifically delegated to him from
time to time by the Chief Executive Officer. Executive shall be subject to the
Bylaws, policies, practices, procedures and rules of the Company, currently
existing and as may be modified from time to time, including those policies and
procedures set forth in the Company’s Code of Conduct and Ethics. Executive’s
principal office, and principal place of employment, shall be at the Company’s
offices, currently in Norwalk, Connecticut, provided that Executive may be
required under business circumstances to travel outside the location of his
principal employment in connection with performing his or her duties under this
Agreement.

 

Section 4 Restrictive Covenants; Representations.

 

 

 

 

4.1 Loyal Performance. During the Executive’s employment with Reed’s, the
Executive will devote his full business time and attention to the performance of
his duties as CFO and will perform his duties and carry out his responsibilities
as CFO in a diligent and businesslike manner. Nothing in this Section 4.1,
however, will prevent the Executive from engaging in additional activities in
connection with personal investments or from serving in a non-management
capacity with any for profit or not for profit organization that does not
conflict with his duties under this Agreement, provided that the Executive shall
give the Board prior notice of his service to any for profit or not for profit
organization so that it may review the same for compliance with the terms of
this Agreement.

 

4.2 Confidential Information. Executive acknowledges that the information,
observations and data (including, without limitation, trade secrets, know-how,
research and inventions, processes, formulas, technology, designs, drawings,
specifications, marketing and advertising materials, distribution and sales
methods and systems, sales and profit figures and other technical and business
information) concerning the business or affairs of the Company or any of its
affiliates obtained by him or her while employed by the Company (“Confidential
Information”) are the property of the Company or such affiliate. Therefore,
Executive agrees that he or she shall not disclose to any unauthorized person or
use for his or her own purposes any Confidential Information without the prior
written consent of the Company, unless and to the extent that the aforementioned
matters become generally known to and available for use by the public other than
as a result of Executive’s acts or omissions to act. Executive will deliver to
the Company at the termination of the Term, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof) to the
extent containing Confidential Information or Work Product (as defined below) of
the Company or any of its affiliates which he or she may then possess or have
under his or her control.

 

4.3. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company’s or any of its affiliates’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company (“Work Product”) belong to the Company or such affiliate. Executive
shall promptly disclose such Work Product to the Company and perform all actions
requested by the Company (whether during or after the Term) to establish and
confirm such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).

 

4.4 Unfair Competitive Activities; Protection of Trade Secrets.

 

(a) Executive acknowledges that Executive’s services to the Company require the
use of information including a formula, pattern, compilation, program, device,
method, technique, or process that the Company has made reasonable efforts to
keep confidential and that derives independent economic value, actual or
potential, from not being generally known to the public or to other persons who
can obtain economic value from its disclosure or use (“Trade Secrets”).
Executive further acknowledges and agrees that the Company would be irreparably
damaged if Executive were to provide similar services requiring the use of such
Trade Secrets to any person or entity competing with the Company or engaged in a
similar business. Therefore, Executive agrees that during the period of
Executive’s employment with the Company or any of its affiliates and thereafter
until the later of (i) three (3) month period immediately thereafter and (ii)
the expiration of the Severance Period (the “Protection Period”), he or she will
not, either directly or indirectly, for himself or herself or any other person
or entity (i) induce or attempt to induce any employee of the Company or any of
its affiliates to leave the employ of the Company or such affiliate, or in any
way interfere with the relationship between the Company or any affiliate and any
employee thereof, (ii) induce or attempt to induce any customer, supplier,
licensee, licensor or other business relation of the Company or any affiliate to
cease doing business with the Company or such affiliate, or in any way interfere
with the relationship between any such customer, supplier, licensee, licensor or
business relation and the Company or any affiliate (including, without
limitation, making any negative statements or communications about the Company
or its affiliates) or (iii) Participate in any business in the United States
that is directly and materially competitive with the material business of the
Company, the innovation, sale and distribution of ginger beer and craft soda, in
which he would be reasonably likely to employ, reveal, or otherwise utilize
Trade Secrets used by the Company prior to the Executive’s termination.
“Participate” includes any direct or indirect interest in any enterprise,
whether as an officer, director, employee, partner, sole proprietor, agent,
representative, independent contractor, consultant, executive, franchisor,
franchisee, creditor, owner or otherwise; provided that the foregoing activities
shall not include the passive ownership (i.e., Executive does not directly or
indirectly participate in the business or management of the applicable entity)
of less than 5% of the stock of a publicly-held corporation whose stock is
traded on a national securities exchange.

 

 

 

 

(b) Executive agrees that the aforementioned covenant contained in Section
4.4(a) is reasonable with respect to its duration, geographical area and scope.
In particular, Executive acknowledges and agrees that the Company and its
affiliates conduct their businesses on a worldwide basis and that the geographic
scope of the covenant contained in Section 4.4(a) is necessary to protect the
goodwill and Confidential Information of the Company and its affiliates.
Executive further acknowledges that the restrictions contained in Section 4.4(a)
do not impose an undue hardship on him or her due to the fact that he or she has
general business skills which may be used in industries other than those in
which each of the Company and its affiliates conduct their businesses and do not
deprive Executive of his or her livelihood. Executive agrees that the covenants
made in Section 4.4(a) shall be construed as agreements independent of any other
provision(s) of this Agreement and shall survive any order of a court
terminating any other provision(s) of this Agreement.

 

(c) If, at the time of enforcement of Sections 4 of this Agreement, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area.

 

(d) Because Executive’s services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages may not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court for specific performance
and/or injunctive or other relief in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation of this Section 4, the
Protection Period will be tolled until such breach or violation has been duly
cured. Executive agrees that the restrictions contained in Section 4 are
reasonable.

 

4.5. Additional Acknowledgments. Executive acknowledges that the provisions of
Section 4 are valuable consideration as set forth in this Agreement. Executive
expressly agrees and acknowledges that the restrictions contained in Sections 4
do not preclude Executive from earning a livelihood, nor do they unreasonably
impose limitations on Executive’s ability to earn a living. Executive
acknowledges that he or she has carefully read this Agreement and has given
careful consideration to the restraints imposed upon Executive by this
Agreement.

 

4.6 Other Businesses. As long as Executive is employed by the Company, Executive
agrees that he or she will not, except with the express written consent of the
Company, become engaged in, render services for, or permit his or her name to be
used in connection with any business other than the business of the Company or
any of its affiliates.

 

 

 

 

4.7 Cooperation. Executive agrees that, following any termination of the
Executive’s employment, Executive will continue to provide reasonable
cooperation to Reed’s and/or any of its subsidiaries and its or their respective
counsel in connection with any investigation, administrative proceeding, or
litigation relating to any matter that occurred during Executive’s employment,
in which the Executive was involved or of which the Executive has knowledge. As
a condition of such cooperation, Reed’s shall reimburse the Executive for
reasonable out-of-pocket expenses incurred at the request of Reed’s and shall
compensate Executive at a daily rate equal to his daily rate of compensation at
the time of termination of his employment. Executive also agrees that, in the
event that the Executive is subpoenaed by any person or entity (including, but
not limited to, any government agency) to give testimony or provide documents
(in a deposition, court proceeding, or otherwise) that in any way relates to the
Executive’s employment by Reed’s, Executive will, if legally permitted, give
prompt notice of such request to Reed’s and, unless legally required to do so,
will make no disclosure until Reed’s subsidiaries has had a reasonable
opportunity to contest the right of the requesting person or entity to such
disclosure.

 

Section 5 Compensation.

 

5.1 Base Salary. The Executive will be paid a base salary at the rate of
$250,000.00 per year (the “Base Salary”). The Base Salary shall be subject to
annual review in the sole discretion of the Board. The Base Salary will be
payable in equal periodic installments in accordance with Reed’s customary
payroll practices.

 

5.2 Bonus.

 

(a) Annual Bonus. In addition to the Base Salary, Executive will be eligible to
receive an annual or other periodic bonus for each partial or full calendar year
(which may, to the extent not relating to achievement of a specific objective
established by the Board in consultation with the Executive as provided below,
be pro-rated for partial calendar years) included in the Term at a target amount
equal to 30% of then current Base Salary payable and based upon performance
criteria to be established by the Board in consultation with the Executive,
which are anticipated to consist of specific objectives for which specified
portions of Bonus will be payable upon achievement and any remainder
discretionary based on individual and Company performance as determined by the
Board ( “Bonus”). In order to be eligible to receive the Bonus, Executive must
be employed at the time of achievement of the specific objective relating
thereto and at the time Bonus payments are determined and paid by the Company.
The Board and the Executive will consult in good faith to establish the Bonus
criteria for each full or partial year included in the Term starting with the
Effective Date and with the commencement of each calendar year included in the
Term commencing after the Effective Date. Any bonus earned with respect to any
partial fiscal year (if any) during the Term will be prorated based upon the
number of days elapsed in such fiscal year. In order to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
and the regulations and guidance promulgated thereunder (collectively, “Code
Section 409A”), it is agreed that the bonus (if any) earned under this Section
5.2 shall be paid no later than (but may be paid earlier in accordance with the
Company’s usual practices) March 15th of the calendar year immediately following
the calendar year in which the fiscal year to which such bonus relates ended.

 

5.3 Benefits. Executive will be entitled to four (4) weeks of paid vacation per
calendar year in accordance with the Company’s vacation and paid time off
policy, inclusive of vacation days and sick days and excluding standard paid
Company holidays, in the same manner as paid time off days for employees of the
Company generally accrue. The Executive and his dependents will be entitled to
participate in all medical insurance and other benefit programs in effect from
time to time and available to senior executives of Reed’s at levels commensurate
with Executive’s position as CFO. The Company will reimburse Executive for all
reasonable expenses incurred by him in the course of performing his or her
duties under this Agreement which are consistent with the Company’s policies in
effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses. To the extent that any
reimbursements or in-kind benefits under this Agreement constitute
“Non-qualified Deferred Compensation” for purposes of Code Section 409A, (i) all
such expenses, benefits or other reimbursements under this Agreement shall be
made on or prior to the last day of the taxable year following the taxable year
in which such expenses were incurred by Executive, (ii) any right to such
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit, and (iii) no such reimbursement, expenses eligible for
reimbursement, or in-kind benefits provided in any taxable year shall in any way
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided in any other taxable year.

 

 

 

 

5.4 Equity. Executive shall be eligible to receive an initial equity award of
(i) 150,000 incentive stock options and (ii) 150,000 restricted stock awards
((i) and (ii), the “Initial Equity Award”) ninety (90) days after the Effective
Date (“Grant Date”), in accordance with the terms and conditions of available
plan and subject to Board approval and plan availability. Of the Initial Equity
Award, one-half (75,000 incentive stock options and 75,000 restricted stock
awards) will vest in equal increments of 18,750 on each of the first, second,
third and fourth anniversaries of the Grant Date (“Incentive Equity”). Of the
Initial Equity Award, the remainder (75,000 incentive stock options and 75,000
restricted stock awards) will vest based on performance criteria to be
determined by the Board or compensation committee of the Board (as the case may
be) in its sole discretion (“Performance Equity”). Executive is responsible for
all Federal and state taxes payable by Executive as a result of the receipt
vesting and exercise of Incentive Equity Awards. The Executive will make an
election under Section 83(b) of the Code with respect to any restricted stock
awards. The Executive may also make equity investments in Reed’s on terms that
may be agreed upon by the Executive and Reed’s.

 

Section 6 Termination of Employment.

 

6.1 Termination by Reed’s. Reed’s may terminate the Executive’s employment with
Reed’s for Cause or without Cause, effective immediately on the day Reed’s gives
notice of such termination to the Executive. For purposes of this Agreement,
“Cause” means (i) a breach by Executive of his or her fiduciary duties to the
Company; (ii) willful and continued failure to perform his duties hereunder
except by reason of Disability (defined below); (iii) the commission of (A) any
crime constituting a felony in the jurisdiction in which committed, (B) any
crime involving moral turpitude (whether or not a felony), (C) any other
criminal act involving embezzlement, misappropriation of money, fraud, theft, or
bribery (whether or not a felony), or ( D) other willful misconduct that results
in material damage to the Company’s business or reputation; (iv) illegal or
controlled substance abuse or insobriety by Executive; (v) any material breach
of this Agreement or any other conduct that is materially damaging to the
Company, or is reasonably expected to be, materially damaging to the Company,
whether to the business interests, finance or reputation, as determined in the
sole discretion of the compensation committee of the Board of Directors; or (vi)
any disqualifying event causing Company “bad actor” disqualification under Rule
506(d) of the Securities Act of 1933, as amended.

 

6.2 Termination by the Executive. The Executive may terminate the Executive’s
employment with Reed’s for Good Reason or without Good Reason, by written notice
to Reed’s effective no earlier than 30 days after the date of such notice if
termination is other than for Good Reason (provided that Reed’s shall have the
right to waive such 30-day notice period and accelerate termination to any date
on or after the date of such notice) and effective upon the expiration of the
cure period described below in this Section 6.2 if termination is for Good
Reason. During any period between receipt of notice of termination from the
Executive, Reed’s may suspend, reduce, or otherwise modify any or all of
Executive’s authority, duties, and responsibilities, and may require the
Executive’s absence from Reed’s offices without any such suspension, reduction,
modification, or requirement constituting grounds for Good Reason. “Good Reason”
means any material breach (whether or not specified above) of this Agreement by
Reed’s. An event described in this Section 6.2 will not constitute Good Reason
unless the Executive provides written notice to Reed’s of the Executive’s
intention to resign for Good Reason and specifying the event or circumstance
giving rise to Good Reason within 30 days of its initial existence and Reed’s
does not cure such breach or action within 30 days after the date of the
Executive’s notice.

 

 

 

 

6.3 Death and Disability. The Executive’s employment under this Agreement will
terminate upon the Executive’s death. In addition, Reed’s may terminate the
Executive’s employment with Reed’s by written notice to the Executive due to
Disability. For purposes of this Agreement, “Disability” means that the
Executive has been unable, with or without reasonable accommodation and due to
physical or mental incapacity, to substantially perform the essential functions
of his duties for 60 days, whether consecutive or non-consecutive, within any
calendar year.

 

6.4 Termination of Agreement. This Agreement will terminate when all obligations
of the parties under this Agreement have been satisfied.

 

6.5 Resignations. Upon any termination of the Executive’s employment hereunder
for any reason, except as may otherwise be requested by Reed’s in writing, the
Executive agrees that he will resign from any and all directorships, committee
memberships and officer positions that he holds with Reed’s or any of its
subsidiaries.

 

Section 7 Remuneration upon Termination of Employment.

 

7.1 Termination Prior to March 1, 2020. If the Executive’s employment with
Reed’s is terminated for any reason prior to March 1, 2020, the Executive shall
be entitled to accrued and unpaid compensation and benefits (including, without
limitation, accrued vacation or paid time off, and then unreimbursed expenses)
through the date of termination of Employment (the “Accrued Benefits”). No
termination of employment prior to March 1, 2020 shall be considered for any
purpose for Cause, without Cause, or for Good Reason.

 

7.2 Termination by Reed’s without Cause or by the Executive for Good Reason. If
the Executive’s employment with Reed’s is terminated after March 20, 2020
pursuant to Section 6.1 by Reed’s without Cause or pursuant to Section 6.2 by
the Executive for Good Reason, the Executive will be entitled to the following:

 

(a) the Accrued Benefits;

 

(b) installment payments equal to the Executive’s Base Salary in effect
immediately prior to the Executive’s termination of employment with Reed’s, less
applicable taxes and withholdings, for the number of months included in the
Severance Period, calculated based on length of Executive’s continued employment
with the Company immediately prior to termination (the “Severance Amount”). The
Executive will receive two months of severance for every full year of service,
up to a maximum of six months (“Severance Period”). For clarity, the Severance
Period will not include severance for periods calculated based on partial years
of service. In addition, to the extent permitted by applicable law, subject to
the Executive’s election of COBRA continuation coverage under Reed’s group
health plan, on the first regularly scheduled payroll date of each month during
the Severance Period, Reed’s will pay the Executive an amount equal to the
difference between the monthly COBRA premium cost and the premium cost to the
Executive as if the Executive were an employee of Reed’s; provided, that such
payments shall cease earlier than the expiration of the Severance Period in the
event that the Executive becomes eligible to receive any comparable health
benefits, including through a spouse’s employer, during the Severance Period
(the “COBRA Payments”). Executive will notify Reed’s of Executive’s eligibility
for health benefits during the Severance Period within 15 days of such
eligibility; and

 

 

 

 

(c) any and all rights he may have as a holder of vested equity interests in
Reed’s or under any applicable plan, program, or arrangement of Reed’s,
including the vested awards under the Initial Equity Grant (“Vested Incentive
Equity”).

 

7.3 Termination by Reed’s for Cause, by the Executive without Good Reason. If
the Executive’s employment with Reed’s is terminated after March 1, 2020 for
Cause, or by the Executive without Good Reason, the Executive will be entitled
to the Accrued Benefits and Vested Incentive Equity.

 

7.4 Termination as a Result of Death or Disability. In the event of the
termination of the Executive’s employment with Reed’s pursuant to Section 6.3 as
a result of death or Disability, the Executive or the Executive’s heirs will be
entitled to the Accrued Benefits and Vested Incentive Equity.

 

7.5 Deferred Compensation Matters.

 

(a) The intent of the parties is that payments and benefits under this Agreement
comply with or be exempt from Internal Revenue Code Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code Section
409A”) and, accordingly, to the maximum extent permitted the Employment
Agreement shall be interpreted to be in compliance therewith or exempt
therefrom. In no event whatsoever shall the Company be liable for any additional
tax, interest or penalty that may be imposed on Executive by Code Section 409A
or damages for failing to comply with Code Section 409A.

 

(b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”

 

(c) To the extent that any payment of base salary or other compensation is to be
paid for a specified continuing period of time beyond the date of the
Executive’s separation from service in accordance with the Company’s payroll
practices (or other similar term), the payments of such base salary or other
compensation shall be made in no event less frequently than monthly.
Notwithstanding the foregoing, with respect to any payments that are intended to
fall under the short-term deferral exemption from Code Section 409A, unless this
Agreement provides a specified and objectively determinable payment schedule to
the contrary, all payments due thereunder shall be made as soon as practicable
after the right to payment vests and in all events by March 15 of the calendar
year following the calendar year in which the right to payment vests. For
purposes of this section, a right to payment will be treated as having vested
when it is no longer subject to a substantial risk of forfeiture as determined
by the Company in its sole discretion.

 

 

 

 

(d) Notwithstanding any other payment schedule provided herein to the contrary,
if Executive is identified on the date of his separation from service a
“specified employee” within the meaning of that term under Code Section
409A(a)(2)(B) (which generally means a key employee of a corporation any stock
of which is publicly traded on an established securities market or otherwise),
then, with regard to any payment or the provision of any benefit that is
considered nonqualified deferred compensation subject to Code Section 409A and
payable on account of a “separation from service,” (i) such payment or benefit
shall not be made or provided until the date which is the earlier of (A) the
expiration of the six (6) month period measured from the date of Executive’s
“separation from service” and (B) the date of Executive’s death (the “Delay
Period”) to the extent required under Code Section 409A and (ii) at the end of
such six (6) month period, the Company shall make an additional payment to
Executive equal to the amount interest accruing at the then-current short-term
applicable federal rate published by the Internal Revenue Service on the value
of any such payment or benefit, accruing from the date on which it would have
otherwise been paid or provided. Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to Executive in a lump sum, and all remaining
payments due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them therein.

 

(e) To the extent that reimbursements or other in-kind benefits under this
Agreement constitute “nonqualified deferred compensation” subject to Code
Section 409A, (i) all such expenses or other reimbursements hereunder shall be
paid on or prior to the last day of the taxable year following the taxable year
in which such expenses were incurred by Executive, (ii) no such reimbursement,
expenses eligible for reimbursement, or in-kind benefits provided in any taxable
year shall in any way affect the expenses eligible for reimbursement, or in-kind
benefits to provided, in any other taxable year, and (iii) Executive’s right to
such reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for any other benefit.

 

(f) For purposes of Code Section 409A, Executive’s right to receive any
installment payment pursuant to the Employment Agreement shall be treated as a
right to receive a series of separate and distinct payments.

(g) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days, the actual date of payment within the specified
period shall be within the sole discretion of the Company.

 

(h) Notwithstanding any other provision of this Agreement to the contrary, in no
event shall any payment under this Agreement that constitutes nonqualified
deferred compensation subject to Code Section 409A be subject to offset,
counterclaim or recoupment by any other amount payable to Executive unless
otherwise permitted by Code Section 409A.

 

 

 

 

7.6 Notwithstanding anything in this Agreement to the contrary, the Company will
have no obligation to pay the Severance Amount and Cobra Payments payable under
this Section 7 during such times as Executive is in breach of Sections 4 hereof.
As a condition to the Company’s obligations (if any) to pay the Severance Amount
and Cobra Payments described in this Section 7, Executive will execute and
deliver a general release in the form attached hereto as Exhibit A (the “General
Release”). Executive shall forfeit all rights to the Severance Amount and Cobra
Payments described in this Section unless the General Release is signed and
delivered (and no longer subject to revocation) within thirty (30) days
following the date of Executive’s separation from service. To the extent any
such cash payment or continuing benefit to be provided is not nonqualified
deferred compensation subject to Code Section 409A, as determined by the Company
in its sole discretion, then such payment or benefit shall commence upon the
first scheduled payment date immediately after the date the release is executed
and no longer subject to revocation (the “Release Effective Date”). The first
such cash payment shall include payment of all amounts that otherwise would have
been due prior to the Release Effective Date under the terms of this Section 7.6
applied as though such payments commenced immediately upon Executive’s
separation from service, and any payments made thereafter shall continue as
provided herein. The delayed benefits shall in any event expire at the time such
benefits would have expired had such benefits commenced immediately following
Executive’s separation from service. To the extent any such cash payment or
continuing benefit to be provided is nonqualified deferred compensation subject
to Code Section 409A, as determined by the Company in its sole discretion, then
such payments or benefits shall be made or commence upon the sixtieth (60th) day
following Executive’s separation from service. The first such cash payment shall
include payment of all amounts that otherwise would have been due prior thereto
under the terms of this Section 4(b) had such payments commenced immediately
upon the Executive’s separation from service, and any payments made thereafter
shall continue as provided therein. The delayed benefits shall in any event
expire at the time such benefits would have expired had such benefits commenced
immediately following the Executive’s separation from service. The Company may
provide, in its sole discretion, that Executive may continue to participate in
any benefits delayed pursuant to this section during the period of such delay,
provided that Executive shall bear the full cost of such benefits during such
delay period. Upon the date such benefits would otherwise commence pursuant to
this Section 7.6, the Company may reimburse Executive the Company’s share of the
cost of such benefits, if any, had such benefits commenced immediately upon
Executive’s separation from service. Any remaining benefits shall be reimbursed
or provided by the Company in accordance with the schedule and procedures
specified therein.

 

Section 8 General Provisions.

 

8.1 Notices. All notices and other communications under this Agreement must be
in writing and are deemed duly delivered when (a) delivered if delivered
personally or by recognized overnight courier service (costs prepaid), (b) sent
by facsimile with confirmation of transmission by the transmitting equipment
(or, the first business day following such transmission if the date of
transmission is not a business day) (c) sent by electronic mail with receipt
acknowledged by the recipient via email reply, or (d) received or rejected by
the addressee, if sent by certified or registered mail, return receipt
requested; in each case to the following addresses or facsimile numbers and
marked to the attention of the individual (by name or title) designated below
(or to such other address, facsimile number or individual as a party may
designate by notice to the other parties in writing):

 

If to the Executive:

______________________

______________________

______________________

 

If to Reed’s:

 

Attention: Norman Snyder, Chief Operating Officer

201 Merritt 7 Corporate Park

Norwalk CT 06851

 

8.2 Amendment. This Agreement may not be amended, supplemented or otherwise
modified except in a writing signed by the Executive and a director or
authorized officer of Reed’s (other than the Executive).

 

 

 

 

8.3 Waiver and Remedies. The Executive and Reed’s may (a) extend the time for
performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any certificate, instrument or document
delivered pursuant to this Agreement or (c) waive compliance with any of the
covenants, agreements or conditions for the benefit of such party contained in
this Agreement. Any such extension or waiver will be valid only if set forth in
a written document signed on behalf of the party against whom the waiver or
extension is to be effective. No extension or waiver will apply to any time for
performance, inaccuracy in any representation or warranty, or noncompliance with
any covenant, agreement or condition, as the case may be, other than that which
is specified in the written extension or waiver. No failure or delay by a party
in exercising any right or remedy under this Agreement or any of the documents
delivered pursuant to this Agreement, and no course of dealing between the
parties, operates as a waiver of such right or remedy, and no single or partial
exercise of any such right or remedy precludes any other or further exercise of
such right or remedy or the exercise of any other right or remedy. Any
enumeration of a party’s rights and remedies in this Agreement is not intended
to be exclusive, and a party’s rights and remedies are intended to be cumulative
to the extent permitted by law and include any rights and remedies authorized in
law or in equity.

 

8.4 Entire Agreement. This Agreement constitutes the entire agreement between
the Executive and Reed’s with respect to its subject matter and supersedes any
prior understandings, agreements or representations between the parties, written
or oral, with respect to the subject matter of this Agreement.

 

8.5 Assignment and Successors. This Agreement binds and benefits the parties and
their respective heirs, executors, administrators, successors and assigns,
except that the Executive may not assign any rights under this Agreement without
the prior written consent of Reed’s and Reed’s may not assign this Agreement or
any of its rights or obligations hereunder without the prior written consent of
the Executive except in the case of an assignment of this Agreement to a
successor to all or substantially all of the business and assets of Reed’s and
its subsidiaries or any business division thereof or a restructuring of Reed’s.
The Executive’s obligations under this Agreement are personal to the Executive
and may not be delegated.

 

8.6 Severability. If any provision of this Agreement is held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement are not affected or impaired in any way and the
parties agree to negotiate in good faith to replace such invalid, illegal and
unenforceable provision with a valid, legal and enforceable provision that
achieves, to the greatest lawful extent under this Agreement, the economic,
business and other purposes of such invalid, illegal or unenforceable provision.
A court of competent jurisdiction, if it determines any provision of this
Agreement to be unreasonable in scope, time or geography, is hereby authorized
by the Executive and Reed’s to enforce the same in such narrower scope, shorter
time or lesser geography as such court determines to be reasonable and proper
under all the circumstances.

 

8.7 Governing Law; Arbitration. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the Connecticut
without giving effect to any choice of law rules or other conflicting provision
or rule that would cause the laws of any jurisdiction to be applied. Reed’s and
the Executive agree that any and all disputes arising out of the terms of this
Agreement, the Executive’s employment by Reed’s, the Executive’s service as an
employee or officer of Reed’s or any of its subsidiaries, or the Executive’s
compensation and benefits, will be subject to binding arbitration in Fairfield
County, Connecticut under the Employment Arbitration Rules of the American
Arbitration Association then in effect, and consent to the jurisdiction to the
federal or state courts in Fairfield County, Connecticut to enforce any
arbitration award rendered with respect thereto. The arbitration shall be
conducted by a single arbitrator as agreed upon between Reed’s and the
Executive. If Reed’s and the Executive cannot agree on a single arbitrator, the
arbitration shall be conducted before a panel of three arbitrators, one selected
by each party hereto and the third arbitrator selected by the parties’ two
arbitrators from a panel provided by the American Arbitration Association. The
costs of the arbitrator along with other arbitration-specific fees shall be
borne equally by the parties. Each party shall bear its own attorneys’ fees and
expenses; provided that the arbitrator may assess the prevailing party’s fees
and costs against the non-prevailing party as part of the arbitrator’s award.
The parties agree to abide by all decisions and awards rendered in such
proceedings. Such decisions and awards rendered by the arbitrators shall be
final and conclusive. All such disputes shall be settled in this manner in lieu
of any action at law or equity; provided, however, that nothing in this
subsection shall be construed as precluding the bringing an action for
injunctive relief or specific performance as provided in this Agreement.

 

 

 

 

8.8 Survival. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations and to the extent that any
performance is required following termination or expiration of this Agreement.

 

8.9 Withholding. All amounts paid pursuant to this Agreement shall be subject to
withholding for taxes (federal, state, local, non-U.S. or otherwise) to the
extent required by applicable law.

 

8.10 Counterparts. The parties may execute this Agreement in multiple
counterparts, each of which constitutes an original as against the party that
signed it, and all of which together constitute one agreement. This Agreement is
effective upon delivery of one executed counterpart from each party to the other
party. The signatures of all parties need not appear on the same counterpart.
The delivery of signed counterparts by facsimile or email transmission that
includes a copy of the sending party’s signature is as effective as signing and
delivering the counterpart in person.

 

8.11 Voluntary Execution; Representations. Executive acknowledges that (a) he or
she has consulted with or has had the opportunity to consult with independent
counsel of his or her own choosing concerning this Agreement and has been
advised to do so by the Company, and (b) he or she has read and understands this
Agreement, is competent and of sound mind to execute this Agreement, is fully
aware of the legal effect of this Agreement, and has entered into it freely
based on his or her own judgment and without duress.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

 

  REED’S INC.         By /s/ John Bello   Name: John Bello   Title: Interim
Chief Executive Officer

 

EMPLOYEE           Signature: /s/ Thomas J. Spisak   Name: Thomas J. Spisak  

 

 

 

 

Exhibit A

FORM OF RELEASE

[NOT FOR EXECUTION]

 

KNOW ALL MEN BY THESE PRESENTS: That the undersigned, ________________
(“Executive”), on behalf of himself and his heirs, legal representatives,
administrators, executors, successors and assigns, and each of them, for good
and valuable consideration received as set forth in the Employment Agreement
dated as of _________, 2019 (the “Employment Agreement”) between Reed’s, Inc., a
Delaware corporation (the “Company”), does hereby unconditionally, knowingly,
and voluntarily release and forever discharge the Company, and its present and
former related companies, subsidiaries and affiliates, and all of their present
and former executives, officers, managers, directors, owners, members,
shareholders, partners, employees, agents, and attorneys, including in their
individual capacity, and each of its and their successors and assigns
(hereinafter collectively the “Released Parties”), from any and all known or
unknown claims, demands, actions or causes of action that now exist or may arise
in the future, based upon events occurring or omissions on or before the date of
the execution of this Release, including, but not limited to any and all claims
whatsoever pertaining in any way to Executive’s employment at the Company or
with any of the Released Parties or the termination of Executive’s employment,
including, but not limited to, any claims under: (1) the Americans with
Disabilities Act; the Family and Medical Leave Act; Title VII of the Civil
Rights Act; 42 U.S.C. Section 1981; the Older Workers Benefit Protection Act;
the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”); the
Employee Retirement Income Security Act of 1974; the Civil Rights Act of 1866,
1871, 1964, and 1991; the Rehabilitation Act of 1973; the Equal Pay Act of 1963;
the Vietnam Veteran’s Readjustment Assistance Act of 1974; the Occupational
Safety and Health Act; and the Immigration Reform and Control Act of 1986; and
any and all other federal, state, local or foreign laws, statutes, ordinances,
or regulations pertaining to employment, discrimination or pay; (2) any state
tort law theories under which an action could have been brought, including, but
not limited to, claims of negligence, negligent supervision, training and
retention or defamation; (3) any claims of alleged fraud and/or inducement, or
alleged inducement to enter into this Release; (4) any and all other tort
claims; (5) all claims for attorneys’ fees and costs; (6) all claims for
physical, mental, emotional, and/or pecuniary injuries, losses and damages of
every kind, including but not limited to earnings, punitive, liquidated and
compensatory damages, and employee benefits; (7) any and all claims whatsoever
arising under any of the Released Parties’ express or implied contract or under
any federal, state, local, or foreign law, ordinance, or regulation, or the
Constitution of any State or the United States; (8) any and all claims
whatsoever against any of the Released Parties for wages, bonuses, benefits,
fringe benefits, vacation pay, or other compensation or for any damages, fees,
costs, or benefits, in each case, except to the extent Executive has vested
rights in any of the same; and (9) any and all claims whatsoever to
reinstatement (collectively, the “Released Claims”); provided, however, that,
notwithstanding anything to the contrary contained herein, this Release shall
not cover and the Released Claims shall extend to any rights or claims, if any,
of Executive (A) as a holder of equity interests in the Company, (B) to
indemnification or advancement of expenses, (C) under Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, (D) under any profit-sharing
and/or retirement plans or benefits in which Executive has vested rights, or (E)
under Section 7 of the Employment Agreement. Executive also intends that this
Release operate as a general release of any and all claims to the fullest extent
permitted by law and a waiver of all unknown claims of the type being released
hereunder.

 

Notwithstanding the provisions of any state statute in effect that provides that
a general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor, and for the purpose of implementing a full and complete release and
discharge of all Releasees with respect to claims in all jurisdictions,
Executive expressly acknowledges that this is intended to include not only
claims that are known, anticipated, or disclosed, but also claims that are
unknown, unanticipated, and undisclosed.

 

 

 

 

Executive acknowledges that the Severance Amount and the COBRA Payment are in
addition to anything of value to which Executive already is entitled from the
Company and constitutes good and valuable consideration for this Release.

 

Executive represents and warrants that he has not previously filed, and to the
maximum extent permitted by law agrees that he will not file, a complaint,
charge, or lawsuit against any member of the Released Parties regarding any of
the claims released herein. If, notwithstanding this representation and
warranty, the Executive has filed or files such a complaint, charge, or lawsuit,
he agrees that he shall cause such complaint, charge, or lawsuit to be dismissed
with prejudice and shall pay any and all costs required in obtaining dismissal
of such complaint, charge, or lawsuit, including without limitation the
attorneys’ fees of any member of the Released Parties against whom he has filed
such a complaint, charge, or lawsuit. This paragraph shall not apply, however,
to a claim of age discrimination under the ADEA or to any non-waivable right to
file a charge with the United States Equal Employment Opportunity Commission
(the “EEOC”); provided, however, that if the EEOC were to pursue any claims
relating to the Executive’s employment with Company, the Executive agrees that
he shall not be entitled to recover any monetary damages or any other remedies
or benefits as a result and that this Release and Section 7 of the Employment
Agreement will control as the exclusive remedy and full settlement of all such
claims by the Executive.

 

Executive agrees not to make disparaging, critical or otherwise detrimental
comments to any person or entity concerning the Released Parties; the products,
services or programs provided or to be provided by the Released Parties; the
business affairs or the financial condition of the Released Parties; or the
circumstances surrounding Executive’s employment and/or termination of
employment from Company. Company agrees to cause its executive and senior
management teams not to take any action, or encourage others to take any action,
to disparage or criticize Executive.

 

Executive acknowledges that he has been given the opportunity to review and
consider this Release for twenty-one (21) days from the date he received a copy.
If he elects to sign before the expiration of the twenty-one (21) days,
Executive acknowledges that he will have chosen, of his own free will without
any duress, to waive his right to the full twenty-one (21) day period.

 

Executive may revoke this Release after signing it by giving written notice to
the Company’s Board of Directors, within seven (7) days after signing it (the
“Revocation Period”). This Release, provided it is not revoked, will be
effective on the eighth (8th) day after execution. The Executive acknowledges
and agrees that if he revokes this Release during the Revocation Period, this
Release will be null and void and of no effect, and neither the Company nor any
other Released Party will have any obligations to pay the Executive the amounts
under Section 7 of the Employment Agreement.

 

Executive acknowledges that he has consulted with an attorney prior to signing
this Release and that he has no knowledge of any facts or circumstances that
give rise or could give rise to any claims under any of the laws listed in this
Release.

 

Executive is signing this Release knowingly, voluntarily and with full
understanding of its terms and effects. Executive is signing this Release of his
own free will without any duress, being fully informed and after due
deliberation. Executive voluntarily accepts the consideration provided to him
for the purpose of making full and final settlement of all claims referred to
above. This Release shall be governed by and construed in accordance with the
laws of the State of Connecticut.