EXHIBIT 10.14
March 29, 2010
Terry Michaelson
Craft Brewers Alliance, Inc.
929 North Russell Street
Portland, OR 97227
Dear Terry:
     The purpose of this letter is to set forth our understanding about your
continued employment as the Chief Executive Officer of Craft Brewers Alliance,
Inc. (the “Company”), effective as of April 1, 2010. This letter supersedes and
replaces any prior offer letter or other agreement regarding your employment by
the Company including the employment letter dated March 12, 2009; provided,
however, that any Long Term Bonus (as defined in your prior employment agreement
with Craft Brands Alliance LLC) shall be paid as set forth in the June 12, 2008,
letter.
     Your employment is “at-will,” which means you or the Company may end the
employment relationship at any time. Our mutual agreement regarding your salary,
severance, and other benefits and obligations is set forth below.
Compensation and Benefits
     Your annual base salary will initially be $221,450 (before standard tax
withholdings and other payroll deductions). Your base salary level will be
reviewed annually for adjustment beginning January 1, 2011, by the Compensation
Committee. In addition, you are entitled to participate in all of the Company’s
employee benefit programs for which you are eligible, including long-term
incentive awards approved by the Compensation Committee for executive officers
from time to time.
     You will be eligible for a yearly bonus, such bonus to be approved by the
Compensation Committee. All or a portion of such bonus may be conditioned upon
achieving certain performance targets approved by the Compensation Committee or
the Board of Directors.
Severance
     In the event that your employment with the Company is terminated by the
Company for any reason other than “for cause” or by you due to “good reason,”
the Company will provide you with severance benefits for a period of time (the
“Severance Period”) as follows:
     (1) For a termination effective after December 31, 2009, and before
January 1, 2011, severance will be payable in accordance with the Company’s
normal payroll schedule

 

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based on your monthly base salary rate in effect at the date of termination for
a Severance Period commencing on the day following termination and extending for
a number of months equal to the number of full years of service you have accrued
with the Company as of December 31, 2009 (including service with Widmer Brothers
Brewing Company and Craft Brands Alliance LLC prior to July 1, 2008); provided
that in no event shall the Severance Period be less than six months or more than
24 months; and
     (2) For a termination effective on or after January 1, 2011, severance will
be payable in accordance with the Company’s normal payroll schedule based on
your monthly base salary rate in effect at the date of termination for a
Severance Period commencing on the day following termination and extending
for12 months.
     In addition, the Company will promptly (in no event later than March 15 of
the calendar year after the year in which your employment terminated) make a
cash payment to you in an amount equal to 100% of your unused Paid Time Off
(“PTO”) hours accrued through the date of termination in accordance with the
provisions of the Company’s PTO Plan then in effect.
     If you become entitled to severance benefits under this agreement, the
Company will also continue to provide you, for the Severance Period or
18 months, whichever is less, the same health benefits as were being provided to
you at the time of termination; provided, however, that such benefits shall
terminate in the event you find new employment with comparable health coverage.
     For purposes of this letter, “for cause” means that you have engaged in
conduct which has substantially and adversely impaired the interests of the
Company, or would be likely to do so if you were to remain employed by the
Company; you have engaged in fraud, dishonesty or self-dealing relating to or
arising out of your employment with the Company; you have violated any criminal
law relating to your employment or to the Company; you have engaged in conduct
which constitutes a material violation of a significant Company policy or the
Company’s Code of Ethics, including, without limitation, violation of policies
relating to discrimination, harassment, use of drugs and alcohol and workplace
violence; or you have repeatedly refused to obey lawful directions of the
Company’s Board of Directors.
     For purposes of this letter, “good reason” means the occurrence of one or
more of the following events without your consent: (a) a material reduction in
your authority, duties, or responsibilities as the Company’s Chief Executive
Officer; (b) a material reduction in the authority, duties, or responsibilities
of the person or persons to whom you report (including, if applicable, a
requirement that you report to a Company officer or employee instead of
reporting directly to the Company’s Board of Directors); or (c) a relocation of
your principal office to a location that is more than 100 miles from Portland,
Oregon; provided, however, that “good reason” shall only be deemed to have
occurred if: (i) within 90 days after the initial existence of the circumstances
constituting “good reason,” you provide the Company with a written notice
describing such circumstances, (ii) the Company fails to cure the circumstances
within 30 days after the Company receives your notice, and (iii) you terminate
your employment with the Company and all the members of the Company’s controlled
group within 90 days of the date of your notice.

 

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     For purposes of this letter, a termination of your employment will be
deemed to occur only when or if there has been a “separation from service” as
such term is defined in Treasury Regulation Section 1.409A-1(h).
     If, during the Severance Period, you become employed or associated with a
brewing or other company that the Company determines, in its reasonable
discretion, is a competitor of the Company or the portion of Anheuser-Busch,
Inc.’s business relating to alcoholic beverages, your severance payments and
benefits under this letter agreement will terminate as of the effective date of
such employment or association.
     The total amount of severance payments and other benefits (except benefits
described in Treasury Regulation Sections 1.409A-1(a)(5) or 1.409A-(b)(9)(v))
provided to you pursuant to this letter agreement shall not exceed two times the
lesser of (i) the sum of your annualized compensation based upon your annual
salary in the year preceding the year in which your employment is terminated
(adjusted for any increase during that year that was expected to continue
indefinitely if your employment had not terminated) or (ii) the applicable
dollar limit under Section 401(a)(17) of the Internal Revenue Code for the
calendar year in which your employment is terminated.
     The severance payments and other benefits under this letter are intended to
be exempt from the requirements of Section 409A of the Internal Revenue Code by
reason of all payments under this agreement being either “short-term deferrals”
within the meaning of Treasury Regulation Section 1.409A-1(b)(4) or separation
pay due to involuntary separation from service under Treasury
Regulation Section 1.409A-1(b)(9)(iii). All provisions of this letter shall be
interpreted in a manner consistent with preserving these exemptions.
     The Company will require you to execute an appropriate general release of
claims that you may have relating to your employment at the Company and
termination of your employment as a condition to your receipt of severance
payments or other benefits other than those required by law or provided to
employees generally. If such general release of claims is not executed within
30 days following the date your employment with the Company is terminated, all
severance payments and other benefits payable after such 30-day period will be
forfeited, and you agree to repay any severance payments, and the value of any
other benefits, paid to you during such period.
Code of Conduct
     By your signature below, you agree to comply with the Company’s Code of
Conduct and Ethics as in effect from time to time, and to be subject to the
Company’s policies and procedures in effect from time to time for senior
executives of the Company.

 

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     We appreciate your continued efforts on behalf of the Company, and look
forward to having you as a member of our team for years to come.
     Sincerely,
 /s/ Kurt Widmer
     Kurt Widmer
     Chairman of the Board
Acknowledged and Agreed:

     
  /s/ Terry E. Michaelson
 
   
       Terry E. Michaelson
   

Date: March 29, 2010