EXHIBIT 10.9 

[ex109andythomasemploy_image1.gif]

December 30, 2015

Andrew J. Thomas
Craft Brew Alliance, Inc.
929 North Russell Street
Portland, OR 97227
Re: Employment Agreement
Dear Andy:
This letter amends and supersedes your employment letter dated November 20, 2013
and any prior formal or informal agreement regarding your employment by Craft
Brew Alliance, Inc. (the “Company”), with the exception of the Employee
Noncompetition and Nonsolicitation Agreement, which is reaffirmed as amended and
extended in Section 4 below.
This letter constitutes your Employment Agreement (the “Agreement”) with the
Company, effective January 1, 2016 (the “Effective Date”). You and the Company
are collectively referred to in this Agreement as “the Parties.” This Agreement
sets forth the terms and conditions of your continued employment with the
Company as its Chief Executive Officer (“CEO”) as of the Effective Date.
1.
Term

The term of this Agreement shall be three (3) years, from January 1, 2016
through December 31, 2018 (the “Contract Term”), subject to Section 3 of this
Agreement.

[ex109andythomasemploy_image2.jpg]

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

Andrew J. Thomas
December 30, 2015
Page 2

2.
Compensation and Benefits

2.1 Base Compensation
As of the Effective Date, your annual base salary rate will be increased to
$439,000 (before standard tax withholdings and other payroll deductions). The
Compensation Committee of the Company’s Board of Directors (the “Board”) will
review and adjust your compensation at the end of each calendar year, with
salary adjustments, if any, generally made effective as of January 1 of each
calendar year.
2.2 Short-Term Incentive Compensation
You will be eligible for yearly short-term incentive (“STI”) compensation
payable following certification of the Company’s financial results for the prior
fiscal year under the Company’s Annual Cash Incentive Bonus Plan for Executive
Officers. For 2016, the STI target amount will equal $350,000. For subsequent
years, the performance targets and STI target amounts will be determined
annually by the Compensation Committee. All or a portion of the target bonus
amount may be conditioned upon the Board’s determination that you have achieved
performance targets approved by the Compensation Committee or the Board. You
must remain employed through the payment date to be eligible for payment of STI
compensation.
2.3
Long-Term Incentive Compensation

You will be eligible for long-term incentive compensation, the details of which
shall be determined in the first quarter of 2016.
2.4
Employee Benefits

You are eligible to participate in employee benefit programs made available to
the Company’s executive officers. You will receive paid time off (“PTO”)
consistent with the policies for executive officers of the Company.
2.5
Retention Bonus

If you remain employed as CEO under this Agreement for the entirety of the
Contract Term, you will be entitled to a retention bonus award in the amount of
One Hundred Thousand Dollars ($100,000). This retention bonus award shall be
paid as follows: (a) Fifty Thousand Dollars ($50,000) drawn in advance in
January 2016, subject to the condition that in the event of any breach of this
Agreement or your failure to remain employed with Company throughout the
Contract Term, you shall repay the $50,000 within thirty (30) days of the breach
or termination of your employment; and (b) Fifty Thousand Dollars ($50,000) paid
upon the satisfactory completion of the Contract Term.
3.
Termination & Severance

3.1
Termination During Contract Term

In the event that the Company terminates effective on a date prior to or as of
the end of the Contract Term for any reason other than “Cause,” or if you
terminate your employment prior to or as of the end of the Contract Term due to
“Good Reason,” the Company will continue to pay you your then current base
salary for 12 months from your termination date (“the Severance Period”). In the
event of a termination by either party without Cause or Good Reason on or before
the end of the Contract Term, the terminating party shall provide the other
party with at least sixty (60) days’ written notice of termination. The
severance payments under this paragraph 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

[ex109andythomasemploy_image2.jpg]

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

Andrew J. Thomas
December 30, 2015
Page 3

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.
In addition, if you become entitled to severance pay under the first paragraph
of this Section 3.1, the Company will also make a lump sum payment to you within
45 days of your termination of employment in an amount equal the amount
necessary to pay your COBRA premiums for continuation of group health insurance
coverage during the Severance Period based on such premiums in effect on the
date of your termination.
3.2
Termination at End of Contract Term

Following the Contract Term, if the parties have not negotiated a new Agreement
and if neither party has provided the sixty-day notice described in Section 3.1,
this Agreement shall terminate (except with respect to any obligations that
expressly extend beyond termination, including without limitation as set forth
in Section 4) and employment may continue on an at-will basis with either party
free to end the employment relationship for any reason at any time, with or
without Cause, Good Reason or notice, and without severance obligations.
3.3
Cause & Good Reason

For purposes of this Agreement, “Cause” shall mean that (i) 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; (ii) you have engaged in fraud, dishonesty or self-dealing relating to
or arising out of your employment with the Company; (iii) you have violated any
criminal law relating to your employment or to the Company; (iv) 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 (v) you have repeatedly refused to obey
lawful directions of the Board, including failing to maintain a residence no
further than fifty (50) miles from the Company’s principal office within six
months after the Board makes such a direction.
For purposes of this Agreement, “Good Reason” shall mean 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; or (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), provided,
however, that “good reason” shall only be deemed to have occurred if: (i) within
ninety (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 thirty
(30) days after the Company receives your notice; and (iii) you terminate your
employment with the Company within ninety (90) days of the date of your notice.
3.4
Release of Claims

The Company will have no obligation to pay any severance pay or benefits under
this Agreement unless you enter into a standard general release of all legal
claims you may have against the Company arising out of or relating to your
employment with the Company within thirty (30) days of receipt of such release
of claims.
3.5
Competition During Severance Period

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

[ex109andythomasemploy_image2.jpg]

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

Andrew J. Thomas
December 30, 2015
Page 4

Company or the portion of the Company’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
foregoing does not supersede or replace any provision of the Employee
Noncompetition and Nondisclosure Agreement between you and the Company dated
November 20, 2013 and extended as specified in this Section 4.
4.
Noncompetition and Nonsolicitation

You agree that the Employee Noncompetition and Nonsolicitation Agreement (the
“Restrictive Covenant Agreement”) dated November 20, 2013, which is attached
hereto as Attachment A, is hereby extended in light of your continued employment
with the Company. You agree that the noncompetition restriction set forth in
Paragraph 3 of the Restrictive Covenant Agreement is extended and modified such
that the noncompetition restrictions set forth in that provision shall extend
through the end of your employment for any reason and for a period of twelve
(12) months following the termination of your employment with the Company. You
further agree that the nonsolicitation restrictions set forth in Paragraph 4 of
the Restrictive Covenant Agreement are hereby extended and modified such that
the nonsolicitation restrictions set forth in that provision shall extend for a
period of twelve (12) months following the termination of your employment. You
further acknowledge that these restrictions are reasonable given the highly
competitive nature of the craft brewing industry and that a failure to comply
with these restrictive covenant provisions may cause the Company irreparable
harm. You further acknowledge that your agreement to refrain from competing and
soliciting for 12 months following termination is a material representation and
inducement for the Company to enter into this Agreement. In addition to any
other remedies, the Parties agree that any breach of the Restrictive Covenant
Agreement, or any competition or solicitation during the 12-month period
following termination of employment, shall cut off any right Employee may
otherwise have to severance pay or benefits under this Agreement. This Section 4
will survive the termination or expiration of this Agreement.
5.
Nondisclosure

At all times during and after your employment with the Company, you agree that
you will not use or disclose any Confidential Information for any purpose,
except for the purpose of benefiting the Company consistent with the Company’s
instructions or intentions during the course of your employment. For purposes of
this Agreement, “Confidential Information” shall be broadly construed to mean
all of the Company’s proprietary or non-public business information and all
trade secrets. You agree to use the highest degree of care in safeguarding
Confidential Information against loss, theft, inadvertent disclosure or
unauthorized access or use. In the event that you receive notice at any time of
any legal obligation to disclose any Confidential Information, you agree to
notify the Company immediately in order to provide the Company with an
opportunity to protect its interests. You further agree that you will deliver to
the Company immediately upon termination of employment or at any time upon the
Company’s request, all Confidential Information, whether or not written,
produced or compiled by you and that you will not maintain access to or
possession of Confidential Information following termination of your employment
at the Company. This nondisclosure obligation and this Agreement supplement, and
do not supersede, any other confidentiality agreement you have entered into at
any time with the Company.

[ex109andythomasemploy_image2.jpg]

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

Andrew J. Thomas
December 30, 2015
Page 5

6.
Code Section 409A

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 letter 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.
7.
Severability

In the event that a court of competent jurisdiction determines that a provision
of this Agreement is unenforceable or not fully enforceable, the parties agree
that this Agreement is severable and should be enforced to the full extent
allowed by law to best effectuate the intentions of the parties.
8.
Code of Conduct

You agree to comply with the Company’s Code of Conduct and Ethics and to be
subject to the Company’s policies and procedures applicable to senior executives
of the Company.
We appreciate your continued leadership and look forward to continuing our
productive and mutually beneficial relationship.
Sincerely,
/s/ David R. Lord            
David R. Lord
Chairman, Compensation Committee
Acknowledged and Agreed:
/s/ Andrew J. Thomas                    Date: December 30, 2015
Andrew J. Thomas
Attachment: Nov. 20, 2013 Employee Noncompetition
and Nonsolicitation Agreement (see Section 4 above)

[ex109andythomasemploy_image2.jpg]