EXHIBIT 10.35
EMPLOYMENT SEPARATION AGREEMENT BETWEEN
PYRAMID BREWERIES INC. AND GARY MCGRATH
     This agreement (the “Employment Separation Agreement”) between you, Gary
McGrath and us, Pyramid Breweries, Inc. (“Pyramid”), is dated for reference
purposes November 29, 2007 which is the date we delivered it to you for your
consideration.
     1. Your full-time employment by us is terminated effective December 28,
2007 (the “Separation Date”).
     2. You will be paid: (a) your regular base salary, less authorized and
customary deductions and withholdings, through the Separation Date; (b) the cash
value of your current, accrued but unused vacation, less customary tax and other
withholdings; (c) your normal salary, less authorized and customary deductions
and withholdings, from the Separation Date through June 27, 2008, which
represents a period of six months. Any sick leave you have accrued will be
forfeited on the Separation Date. You understand and agree that you have no
right to receive any further payments for salary, bonuses, profit sharing or any
other form of compensation or incentive compensation unless indicated in this
document. Payments under 2 (c) will not begin until you have executed this
Employment Separation Agreement and the revocation period set forth at paragraph
14 has expired.
     3. Your participation in all Pyramid health/dental plans ends on June 30,
2008 per the terms of your Termination Clause. After that date continuation
coverage of health/dental insurance will be made available to you and your
dependents, at your expense, to the extent required by federal law. Your rights
under any retirement benefit plans in which you may have participated will be
determined in accordance with the written plan documents governing those plans.
     4. You will be paid a pro rata share, through December 28, 2007 (your
termination date) of any 2007 personal performance bonus awards for which you
are eligible for under the 2007 Officer Incentive Compensation Plan in the year
of termination upon approval of the Compensation Committee.
     5. You will be granted a pro rata share through December 28, 2007 (your
termination date) for any stock awards or stock units as set forth in the letter
dated April 26, 2006 re: Revision in Officer Compensation and Termination
Provisions.
     6 All telephone reference checks and verifications of your prior employment
must be directed to Human Resources. In response to any such inquiries, Human
Resources will only disclose dates of employment, last position held, duties and
responsibilities in that position, and final rate of pay.
     7. In consideration for the payments and other promises described at
paragraphs 1, 2, 3, 4 and 5, you hereby release us from any and all claims of
any kind, known or unknown, related to or arising out of your employment by
Pyramid and/or the separation of that

 

--------------------------------------------------------------------------------

 

employment. You specifically understand that you are waiving any rights or
claims that you may have under any federal, state or local law, including
without limitation the Civil Rights Act of 1964 (including Title VII of that
Act); the Age Discrimination in Employment Act of 1967, American With
Disabilities Act, the Older Workers Benefit Protection Act, the Family and
Medical Leave Act, the Employee Retirement Income Security Act and the
Washington Law Against Discrimination. You understand that the claims you are
releasing include any claims for discrimination on the basis of age under
federal, state or local law. The release you are giving releases not only all
claims you may have against Pyramid, but also all claims you may have against
Pyramid’s past and present shareholders, officers, directors, agents, employees,
representatives, attorneys, parents, subsidiaries, affiliates, benefit plans,
predecessors, successors, transferees and assigns. You agree not to complain to
any governmental agency about any of the claims you have released in this
Employment Separation Agreement and you represent and warrant that you have not
already done so. You also agree never to assert any of these claims in any
lawsuit, administrative proceeding or arbitration and you represent and warrant
that you have not already done so. You understand that you are releasing
potentially unknown claims, and that you may have limited knowledge with respect
to some of the claims being released. You agree that this release is fairly and
knowingly made. You assume the risk of mistake in entering into this Employment
Separation Agreement.
     8. You represent and warrant that upon the Separation Date or our request,
whichever is earlier, you will return all keys, credit cards, documents and
other material that belong to us. You further agree neither during this
agreement or at any time thereafter will you disparage us or our business or
services. You also agree that following the Separation Date, you will not, apart
from good faith competition, interfere with our relationships with our
customers, potential customers, employees, vendors, bankers or others. Without
limiting the generality of the foregoing, you acknowledge and agree that
pursuant to paragraph 13 of your Employment Agreement and Non-competition
Agreement dated October 25, 1999, you may not solicit, directly or indirectly,
any employee to leave his or her employment with Pyramid for a period of
12 months following the Separation Date.
     9. You agree that information not generally known to the public to which
you have been exposed as a result of being employed by us is confidential
information that belongs to us. You agree that at all times you will hold
Pyramid’s confidential information in strict confidence, and not disclose or use
it except as authorized by us and for our benefit.
     10. You acknowledge that with the payments and other promises set forth at
paragraphs 2 through 5 above, Pyramid has fully and forever satisfied, in fact
exceeded, all obligations owed to you.
     11. You acknowledge that effective as of the date of this Employment
Separation Agreement you shall not incur expenses, or enter into contracts,
agreements or understandings, on Pyramid’s behalf without the prior written
consent of the Chief Executive Officer.
     12. This Employment Separation Agreement does not constitute and may not be
construed as an admission of liability on the part of Pyramid or of any persons
or entities relating in any way to Pyramid or an admission of any violation of
any applicable law or regulation. You and we have entered into this Employment
Separation Agreement solely to facilitate the cessation of their prior
employment relationship.

 

--------------------------------------------------------------------------------

 

     13. You agree to keep the terms of this Employment Separation Agreement
confidential. You agree that except as otherwise required by law, you shall not
disclose to any third party, except your legal counsel, accountants and tax
advisors, any of the terms of this Employment Separation Agreement. You
represent and warrant that you have not already done so.
     14. You have 21 days to consider this Employment Separation Agreement
before signing it. You may use as much or as little of this 21-day period as you
wish before signing. The 21-day period expires December 20, 2007 at 5:00 p.m.
(the “Expiration Date.”) You have seven calendar days after signing this
Employment Separation Agreement to revoke it. Revocation may be made by
delivering a written notice of revocation to Sylvia Washington, Human Resources
Director. If you have not signed and returned this agreement by the Expiration
Date or you timely revoke it after signing, your employment nevertheless will
remain terminated effective the Separation Date and you will only be paid your
accrued vacation, compensation, less authorized and customary deductions and
withholdings, earned through the Separation Date. You agree that you have had
reasonable time in which to consider whether to sign this Employment Separation
Agreement.
     15. Each of the undersigned parties to this Employment Separation Agreement
has had ample opportunity to review the facts and law relevant to this issue,
has consulted fully and freely with competent counsel of its choice if desired,
and has entered this Employment Separation Agreement knowingly and intelligently
without duress or coercion from any source.
     16. This Employment Separation Agreement is governed by the internal laws
of the State of Washington without giving effect to provisions thereof related
to choice of laws or conflict of laws. Venue and jurisdiction of any legal
proceeding of any kind, including arbitration and civil litigation, involving
this Employment Separation Agreement or your employment shall exist exclusively
in state and federal courts located in King County, Washington, unless
injunctive relief is sought by Pyramid and, in our sole judgment, may not be
effective unless obtained in some other venue. In any dispute involving this
Employment Separation Agreement, the party who substantially prevails shall be
entitled to recover reasonable attorneys’ fees, costs and disbursements from the
other party. This Employment Separation Agreement is the final and complete
expression of all agreements between us on all subjects. You acknowledge that
you have had adequate time to review and consider this agreement and consult
with counsel. You acknowledge you are not signing this agreement relying on
anything not set out here.

       
AGREED BY EMPLOYER:
  AGREED BY EMPLOYEE:  
 
     
/s/ Scott S. Barnum
  /s/ Gary McGrath  
 
     
Scott Barnum
  Gary McGrath  
Chief Executive Officer
  Date: December 4, 2007  
Date: December 4, 2007