AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (the “Agreement”) is entered into
as of December 6, 2018 (the “Effective Date”), by and between Eastside
Distilling, Inc., a Nevada corporation (the “Company”), and Robert Manfredonia
(“Executive”) (collectively, the “Parties”). The Parties had entered into (i) an
Employment Agreement effective April 2, 2018, and (ii) a First Amendment to
Employment Agreement effective October 5, 2018 (the “Prior Agreements”). This
Agreement shall replace the Prior Agreements, and shall be deemed controlling
and effective, except to the extent of representations made in the Prior
Agreements, which shall survive indefinitely.

 

1. Duties and Scope of Employment.

 

(a) Positions and Duties. Executive will serve as President of the Company as of
the Effective Date. Executive will render such business and professional
services in the performance of his duties, consistent with Executive’s position
within the Company, as will reasonably be assigned to him by the Company’s CEO,
to whom he shall report, and the Company’s Board of Directors (the “Board”).

 

(b) Employment Term. The term of Executive’s employment shall end three (3)
years from the Effective Date, unless the Company terminates Executive for Cause
(as defined below) prior to the end of such three-year term. At or about six (6)
months before the end of the three-year term, Executive and the Company will
negotiate an extension to the term in good faith on mutually agreeable terms. If
no agreement to extend the term results from such good-faith negotiations,
Executive and the Company will use best efforts to enter into a consulting
arrangement for the provision of continuing services to the Company on mutually
agreeable terms. The period Executive is employed by the Company under this
Agreement is referred to herein as the “Employment Term.”

 

(c) Obligations. During the Employment Term, Executive will devote Executive’s
full business efforts and time to the Company and will use good faith efforts to
discharge Executive’s obligations under this Agreement to the best of
Executive’s ability and in accordance with each of the Company’s corporate
guidance and ethics guidelines, conflict of interest policies and code of
conduct as may be in effect from time to time. Notwithstanding the foregoing,
nothing in this letter shall preclude Executive from devoting reasonable periods
of time to charitable and community activities, managing personal investment
assets and, subject to approval of the Board which will not be unreasonably
withheld, serving on boards of other companies (public or private) not in
competition with the Company, provided that none of these activities interferes
with the performance of Executive’s duties hereunder or creates a conflict of
interest.

 

(d) Work Location. Executive’s principal place of employment shall be at the
Company’s corporate headquarters in Portland, Oregon, subject to business travel
as needed to properly fulfill Executive’s employment duties and
responsibilities. The Company acknowledges and agrees that Executive’s principal
place of residence may be outside of the State of Oregon.

 

2. Compensation.

 

(a) Base Salary. As of the Effective Date, the Company will pay Executive an
annualized base salary of $150,000 as compensation for his services, subject to
review from time to time by the Compensation Committee of the Board (the
“Compensation Committee”) (such annual salary, as is then effective, to be
referred to herein as “Base Salary”). All compensation paid to Executive will be
paid periodically in accordance with the Company’s normal payroll practices and
be subject to the usual, required withholdings.

 

(b) RSU Grants. The Company will recommend to the Compensation Committee that it
grant the Executive $37,500 worth of RSUs within the first 5 days of the
completion of each quarterly period subsequent to the Effective Date. Each award
will be immediately vested and will be subject to the terms and conditions of
the 2016 Equity Incentive Plan and an award agreement (collectively, the “Equity
Documents”). Notwithstanding the foregoing, Executive shall not be entitled to
any form of equity award unless and until the Compensation Committee or the
Board grants Executive the equity award and Executive executes and delivers all
applicable award agreements regarding the same.

 

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(c) Bonus. During Executive’s employment, Executive will be eligible to
participate in the Company’s biannual bonus plan. Subject to the terms of this
Section 2(c), Executive’s target bonus shall be $100,000 per annum. Actual
payments will be determined based on a combination of Company results and
individual performance against the applicable performance goals established by
the Compensation Committee. For 2018, Executive will receive a pro-rated annual
bonus based on the number of days Executive is employed during the year.
Executive must remain continuously employed through the bonus payment date to be
eligible to receive an annual bonus payment for a previous fiscal year.

 

3. Employee Benefits and Perquisites. Executive will be eligible to participate
in the employee benefit plans and programs generally available to the Company’s
senior executives, subject to the terms and conditions of such plans and
programs. Executive will be entitled to other benefits and perquisites that are
made available to other senior executives of the Company, each in accordance
with and subject to the eligibility and other provisions of such plans and
programs. The Company reserves the right to amend, modify or terminate any of
its benefit plans or programs at any time and for any reason.

 

4. Expenses. The Company will reimburse Executive for reasonable expenses
incurred by Executive in the furtherance of the performance of Executive’s
duties hereunder, in accordance with the Company’s expense reimbursement policy
as in effect from time to time. In addition, the company shall provide a $500
per month car allowance to Executive.

 

5. Termination of Employment. If Executive’s employment with the Company
terminates for any reason, Executive will be entitled to any (a) unpaid Base
Salary accrued up to the effective date of termination; (b) pay for accrued but
unused vacation; (c) benefits or compensation as provided under the terms of any
employee benefit and compensation agreements or plans applicable to Executive;
and (d) unreimbursed business expenses required to be reimbursed to Executive.

 

6. Severance and Acceleration.

 

(a) Termination by the Company Without Cause. If Executive’s employment is
terminated by the Company without Cause (as defined below), then, subject to
Section 7, Executive will receive, in addition to the compensation set forth in
Section 5, payment of the aggregate of Executive’s Base Salary and continuation
of his benefits for six (6) months, such cash amount to be paid out in a lump
sum and the benefits to be paid in accordance with the Company’s regular payroll
practices, except to the extent timing of payments are modified by the 409A
provision provided in Section 8 below.

 

(b) Definition of Cause. For purposes of this Agreement, “Cause” will mean:

 

(i) Executive’s willful and continued failure to perform the duties and
responsibilities of his position after there has been delivered to Executive a
written demand for performance from the Board which describes the basis for the
Board’s belief that Executive has willfully and continued to fail to perform his
duties and provides Executive with thirty (30) days to take corrective action
(for example, Executive’s failure to adhere to the pre-arranged and mutually
agreed-upon time spent in Portland, Oregon would constitute failure to perform
Executive’s duties and responsibilities of his position);

 

(ii) Any act of personal dishonesty taken by Executive in connection with his
responsibilities as an employee of the Company with the intention or reasonable
expectation that such action will result in the substantial personal enrichment
of Executive;

 

(iii) Executive’s conviction of, or plea of nolo contendere to, a felony;

 

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(iv) Executive’s commission of any tortious act, unlawful act or malfeasance
which causes or reasonably could cause (for example, if it became publicly
known) material harm to the Company’s standing, condition or reputation;

 

(v) Any material breach by Executive of the Company’s standard form of
Confidentiality and Proprietary Rights Agreement, in substantially the form
attached hereto as Exhibit A (such agreement, the “Confidentiality Agreement”)
or any other improper disclosure by Executive of the Company’s confidential or
proprietary information;

 

(vi) A breach of any fiduciary duty owed to the Company by Executive that has or
could reasonably be expected to have a material detrimental effect on the
Company’s reputation or business; or

 

(vii) Executive (A) obstructing or impeding; (B) endeavoring to influence,
obstruct or impede; or (C) failing to materially cooperate with, any
investigation authorized by the Board or any governmental or self-regulatory
entity (an “Investigation”). However, Executive’s failure to waive
attorney-client privilege relating to communications with Executive’s own
attorney in connection with an Investigation will not constitute “Cause.”

 

(c) Voluntary Termination or Termination for Cause. If Executive’s employment is
terminated voluntarily, due to death or disability, or is terminated for Cause
by the Company, then (i) all further vesting of Executive’s outstanding equity
awards will terminate immediately; and (ii) except as set forth in Section 5,
all payments of compensation by the Company to Executive hereunder will
terminate immediately.

 

7. Conditions to Receipt of Severance and Acceleration.

 

(a) Separation Agreement and Release of Claims. The receipt of any severance or
other benefits pursuant to Section 6 will be subject to Executive signing and
not revoking a separation agreement and release of claims in form and substance
reasonably acceptable to the Company in its discretion that becomes effective no
later than sixty (60) days following Executive’s employment termination date
(such date, the “Release Deadline”). If the release does not become effective by
the Release Deadline, Executive will forfeit any rights to severance under this
Agreement. In no event will severance payments be paid or provided until the
Release Deadline. Any payments delayed from the date Executive terminates
employment through the Release Deadline will be payable in a lump sum without
interest on the Release Deadline and all other amounts will be payable in
accordance with the payment schedule applicable to each payment or benefit. In
the event the termination occurs at a time during the calendar year where the
release could become effective in the calendar year following the calendar year
in which Executive’s termination occurs, then any severance payments under this
letter that would be considered Deferred Compensation Separation Benefits (as
defined below) will be paid on the first payroll date to occur during the
calendar year following the calendar year in which such termination occurs, or,
if later, (i) the Release Deadline, (ii) such time as required by the payment
schedule provided above that is applicable to each payment or benefit, or (iii)
the Delayed Initial Payment Date (as defined below).

 

(b) Other Requirements. Executive’s receipt and retention of severance payments
will be subject to Executive executing and continuing to comply with the terms
of the Confidentiality Agreement.

 

8. Section 409A.

 

(a) Notwithstanding anything to the contrary in this Agreement, no severance pay
or benefits payable upon separation that is payable to Executive, if any,
pursuant to this Agreement, when considered together with any other severance
payments or separation benefits that are considered deferred compensation
(together, the “Deferred Compensation Separation Benefits”) under Section 409A
of the Internal Revenue Code (the “Code”) and the final regulations and official
guidance thereunder (“Section 409A”), will be payable until Executive has a
“separation from service” within the meaning of Section 409A.

 

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(b) Notwithstanding anything to the contrary in this Agreement, if Executive is
a “specified employee” within the meaning of Section 409A, any Deferred
Compensation Separation Benefits that are payable within the first six (6)
months following Executive’s separation from service, will become payable on the
first payroll date that occurs on or after the date six (6) months and one (1)
day following the date of Executive’s separation from service (the “Delayed
Initial Payment Date”). All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit. Notwithstanding anything herein to the
contrary, if Executive dies following Executive’s termination of employment but
prior to the six (6) month anniversary of Executive’s termination of employment,
then any payments delayed in accordance with this paragraph will be payable in a
lump sum as soon as administratively practicable after the date of Executive’s
death and all other Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or benefit. Each
payment and benefit payable under this Agreement is intended to constitute
separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.

 

(c) Any amount paid under the Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations will not constitute Deferred Compensation Separation Benefits for
purposes of this Agreement. Any amount paid under the Agreement that qualifies
as a payment made as a result of an involuntary separation from service pursuant
to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed
the Section 409A Limit will not constitute Deferred Compensation Separation
Benefits for purposes of this Agreement. For this purpose, “Section 409A Limit”
means the lesser of two (2) times: (i) Executive’s annualized compensation based
upon the annual rate of pay paid to Executive during Executive’s taxable year
preceding Executive’s taxable year of Executive’s termination of employment as
determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount
that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which Executive’s employment is
terminated.

 

(d) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. Executive and the
Company agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A.

 

9. Representations. By executing this Agreement, Executive affirms the
representations made in the Prior Agreements and represents that Executive is
able to accept this role and carry out the work that it would involve.

 

10. Confidential Information. Executive reaffirms that certain confidentiality
agreement dated as of [INSERT] between the Company and Executive, which remains
in full force and effect in accordance with its terms.

 

11. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Executive upon Executive’s
death, and (b) any successor of the Company. Any such successor of the Company
will be deemed substituted for the Company under the terms of this Agreement for
all purposes. For this purpose, “successor” means any person, firm, corporation,
or other business entity which at any time, whether by purchase, merger, or
otherwise, directly or indirectly acquires all or substantially all of the
assets or business of the Company. None of the rights of Executive to receive
any form of compensation payable pursuant to this Agreement may be assigned or
transferred except by will or the laws of descent and distribution. Any other
attempted assignment, transfer, conveyance, or other disposition of Executive’s
right to compensation or other benefits will be null and void.

 

12. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (a) on the date of
delivery if delivered personally; (b) one (1) day after being sent overnight by
a well-established commercial overnight service, or (c) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the Parties or their successors at the following addresses, or
at such other addresses as the Parties may later designate in writing:

 

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If to the Company:

 

Eastside Distilling, Inc.

1001 SE Water Ave, suite 390

Portland, OR 97214

Attn: Chief Executive Officer

 

If to Executive, at the address set forth on the signature page hereto.

 

13. Severability. If any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said provision.

 

14. Arbitration. The Parties agree that any dispute or controversy arising out
of, relating to, or concerning the interpretation, construction, performance, or
breach of this Agreement will be settled by arbitration to be held in Multnomah
County, Oregon, in accordance with the terms and conditions of the
Confidentiality Agreement.

 

15. Integration. This Agreement, together with the Confidentiality Agreement,
and the Equity Documents referenced herein, represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement will be
binding unless in a writing and signed by duly authorized representatives of the
parties hereto. In entering into this Agreement, no party has relied on or made
any representation, warranty, inducement, promise, or understanding that is not
in this Agreement. To the extent that any provisions of this Agreement conflict
with those of any other agreement, the terms in this Agreement will prevail.

 

16. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, will not operate as or be construed to be a
waiver of any other previous or subsequent breach of this Agreement.

 

17. Headings. All captions and Section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

 

18. Tax Withholding; Clawback. All payments made pursuant to this Agreement will
be subject to withholding of applicable taxes. Any amounts payable hereunder are
subject to any policy (whether currently in existence or later adopted)
established by the Company providing for clawback or recovery of amounts that
were paid to Executive. The Company will make any determination for clawback or
recovery in its sole discretion and in accordance with any applicable law or
regulation.

 

19. Governing Law. This Agreement and any disputes or claims arising hereunder
will be construed in accordance with, governed by and enforced under the laws of
the State of Oregon without regard for any rules of conflicts of law. Executive
expressly consents to the personal jurisdiction of the state and federal courts
located in Multnomah County, Oregon for any lawsuit filed there against him by
the Company arising from or relating to this Agreement.

 

20. Acknowledgment. Executive acknowledges that he has had the opportunity to
discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.

 

21. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned.

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by a duly authorized officer, effective as of the Effective Date.

 

  COMPANY:   EASTSIDE DISTILLING, INC.         Name: Grover Wickersham   Title:
CEO

 

  EXECUTIVE:       Robert Manfredonia       Address:                  

 

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EXHIBIT A

 

Form of Confidentiality Agreement

 

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