Document:

exv10w34

 

EXHIBIT 10.34

December 4, 2007

TO: Tim McGettigan

FROM: Scott Barnum

RE: Employment Agreement

This letter confirms the basic terms and conditions of our offer of promotion to you. Please
review it carefully and call me if you have any questions or comments. Once you have reviewed it
and had your questions and concerns, if any, addressed to your satisfaction, please sign it and
retain a copy for yourself and return the original to me. If you accept the offer, this letter
will be maintained in your personnel file.

The title of your position is Vice President of Sales reporting to the CEO (me). Stated broadly,
you are responsible for directing all sales, account management, distribution and market
development activities to ensure long tern profitable growth. This includes leading the
development of sound regional business plans with distributors to strengthen their performance and
capabilities, contributing to the development of strong brand / marketing plans and initiatives,
and establishing and managing the development of strong / value added type relationships with our
primary retail customers. In addition you are expected to develop a culture and environment within
the sales group that is consistent with the corporate culture and reinforces the importance of
proper recruitment, training, performance management, coaching, counseling, recognition, rewards,
etc. striving to make the Pyramid Sales organization the #1 team in the craft beer category.

We intend to provide you with a more detailed job description in the near term. However, you
should bear in mind that because we staff ourselves leanly, we will require you to perform a broad
range of tasks. Further, your tasks may evolve over time as the organization itself grows and
matures. You will be expected to perform all tasks reasonably assigned to you, regardless of
whether they fall within the scope of your job description.

Compensation and Benefits

Your compensation and benefits package for this promotion will include the following:

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	 	1.	 	Your base salary will be $5,769.23 per pay period ($150,000 per annum), payable
bi-weekly in arrears, by direct bank transfer.
	 
	 	2.	 	You will be eligible to participate in the Company’s Officer Incentive Compensation
Bonus Plan (OICP), effective January 1, 2008. You will receive more information regarding
this plan after approval by the Compensation Committee.
	 
	 	3.	 	You will be granted restricted stock awards under the Company’s 2004 Equity Incentive
Plan as follows:

	 	a.	 	Annual Awards. You will be granted a Restricted Stock Award
for 4,000 shares on January 1, 2008.
	 
	 	b.	 	Annual Performance Awards. You will be granted stock awards or
stock units for an additional 1,000 shares based on the Company’s achievement of
certain performance goals beginning January 1, 2008 and on the next three
anniversaries of that date.

	 	 	 	You will receive further information regarding these stock awards, including applicable
vesting schedules, in the near future.
	 
	 	4.	 	You will receive the termination provisions and payments as outlined in Addendum A of
this letter. These provisions supersede those outlined in your November 6, 2006 employment
agreement for your promotion to Regional Director.
	 
	 	5.	 	Your annual performance review is scheduled for early 2008 consistent with the
company’s annual performance review process and timeline. Interim performance reviews are
scheduled at your manager’s discretion.
	 
	 	6.	 	Your monthly car allowance will be $575.00.

The terms of this promotion will be effective December 1, 2007.

If you have any questions about any aspect of this letter, please let me know. If you understand
the letter and agree to its contents, please sign below, return the original to me and retain a
copy for your records.

I am excited about our future together as part of the executive team here at Pyramid Breweries and
am looking forward to working with you.

Sincerely,

/s/ Scott S. Barnum

Scott Barnum

Chief Executive Officer

	 	 	 
	/s/ Tim McGettigan

	 	December 4, 2007
	 

	 	 
	Tim McGettigan

	 	Date

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Addendum A:

Termination Provision:

In the event your employment may be terminated, your compensation and benefits shall terminate
except as otherwise provided below:

Without Cause or Good Reason:

Either you or the company may terminate your employment at any time by giving fourteen (14)
calendar days’ advance written notice of termination to the other without the necessity of cause or
good reason (provided, however, that the Company may elect to terminate you on fewer than fourteen
(14) calendar days’ notice, in which case you will be entitled to receive the base salary and
benefits you would have received had the Company given you the full fourteen (14) calendar days’
notice).

By Company for Cause:

The Company may terminate your employment for cause, without advance written notice of termination,
by giving written notice of such termination. For purposes of this agreement “cause” means and is
limited to dishonesty, fraud, commission of a felony or of a crime involving moral turpitude,
harassment or illegal discrimination of any nature, including sexual harassment, destruction,
theft, or unauthorized use or distribution of Company property or confidential information,
fighting with an employee or customer or vendor, intoxication at work, use of alcohol to an extent
that it impairs your performance of your duties, use of illegal drugs at any time, malfeasance or
gross negligence in the performance of your duties, violation of law in the course of employment,
your failure or refusal to perform his or her duties, your failure or refusal to follow reasonable
instructions or directions, misconduct, or any material beach of your duties or obligations to
Company.

Death:

Your employment shall terminate automatically upon your death.

Permanent Disability:

The Company may terminate your employment immediately if you become permanently disabled. For
purposes of this agreement you will be considered “permanently disabled” if, for a continuous
period of twenty-four (24) weeks or more, and you have been unable to perform the essential
functions of the job because one or more mental or physical illnesses and/or disabilities, provided
that Company may grant you unpaid leave if and to the extent that, in Company’s judgment, doing so
is required by law.

Non-raiding of Employees:

Our employees are a vital part of our business. Therefore, you agree that for twelve (12) months
after your employment with the Company ends, regard of the reason, you shall not solicit, directly
or indirectly, any employee to leave his or her employment with the Company. For the purposes of
this agreement, the phrase “shall not solicit directly or indirectly”, includes without limitation
that you:

	 	a)	 	Shall not identify any Company employees to any third party as potential candidates for
employment, such as disclosing names, backgrounds and qualifications, of any Company
employees.
	 
	 	b)	 	Shall not personally or though any other person approach, recruit, or otherwise solicit
employees of the Company to work for any other employer; and
	 
	 	c)	 	Shall not participate in any pre-employment interviews with any person who was employed
by the Company while employed or retained by the Company.

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Termination Payments:

Termination Without Cause:

If the Company terminates your employment at any time after January 1, 2009 when neither cause nor
permanent disability exists,

	 	a)	 	The Company shall pay you, as liquidated damages and in lieu of all other remedies to
which you might be entitled arising out of the termination, termination payments equal to
six month’s salary plus any incentive compensation bonuses for which you are eligible
under the terms of the applicable plan at that time; and
	 
	 	b)	 	For a six-month period after the date of termination, the Company shall continue to
provide at the Company’s cost, the Company’s health benefits to you and qualifying family
members.
	 
	 	c)	 	Such liquidated damages shall be paid only if you execute a full and final general
release of all claims against Company (including Company’s officers, directors, agents,
employees and assigns) arising out of your employment relationship with Company.

Termination payments shall be paid out at your normal payroll rate on regular payroll days subject
to normal payroll deductions.

All Other Terminations:

In all cases of termination, including, but not limited to, a termination by Company for cause or
resignation of employment, your compensation and benefits shall terminate on the date the
employment ends and you shall not be entitled to any termination payments or damages.

4exv10w35

 

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

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