Document:

exv10w20

 

EXHIBIT 10.20

SUMMARY SHEET

OF

DIRECTOR COMPENSATION AND EXECUTIVE CASH COMPENSATION

DIRECTOR COMPENSATION

Non-employee directors of Redhook are currently entitled to receive both stock-based and cash
compensation for their service on the Redhook board:

Stock-based Compensation:

	 	•	 	Each non-employee director, other than A-B designated directors, is entitled to receive
a grant of 3,500 shares of Redhook common stock upon their election to the board of
directors at the Annual Meeting of Shareholders. In lieu of receiving 3,500 shares,
directors may elect to receive a lesser number of shares plus a cash payment equal to the
taxes to be paid on their stock grant.

Cash Compensation:

	 	•	 	Each non-employee director is entitled to receive annual compensation of $10,000, which
will be paid quarterly.
	 
	 	•	 	The Chairs of each of the Nominating and Governance, Audit, Marketing and Compensation
Committees are entitled to receive additional annual compensation of $4,000, which will be
paid following the Annual Meeting of Shareholders.
	 
	 	•	 	Audit Committee members are entitled to receive an additional annual payment of $1,000,
which will be paid following the Annual Meeting of Shareholders.
	 
	 	•	 	Members of the Corporate Strategy Committee are entitled to receive, for service through
March 31, 2008, compensation of $7,500 per quarter. The Chair of the Corporate Strategy
Committee is also entitled to receive an additional quarterly payment of $2,500 for service
through March 31, 2008.

EXECUTIVE OFFICER COMPENSATION

The current 2008 base salaries for the Company’s executive officers are:

	 	 	 	 	 
	Paul S. Shipman

Chief Executive Officer and Chairman of the Board
	 	$	267,800	 
	 
	 	 	 	 
	David J. Mickelson

President
	 	$	199,250	 
	 
	 	 	 	 
	Jay T. Caldwell

Chief Financial Officer and Treasurer
	 	$	180,000	 

Executive officers are eligible to receive an annual incentive payment that will be paid
upon achieving certain targets per terms set forth by, and as approved by, the Compensation
Committee or the board. For 2008, the Compensation Committee has included additional
performance targets related to the closing of the proposed merger
with Widmer Brothers Brewing Company. The 2008 target incentives for the Company’s
executive officers are:

	 	 	 	 	 
	Paul S. Shipman

Chief Executive Officer and Chairman of the Board
	 	$	53,560	 
	 
	 	 	 	 
	David J. Mickelson

President
	 	$	100,000	 
	 
	 	 	 	 
	Jay T. Caldwell

Chief Financial Officer and Treasurer
	 	$	36,000	 

The Company also pays a monthly car allowance in accordance with each officer’s letter of
agreement regarding employment. The current car allowances for each of the Company’s
executives are $10,200 per year.exv10w44

 

EXHIBIT 10.44

AMENDMENT NO. 1 TO

LICENSING AGREEMENT

	 	 	 
	By:

	 	Widmer Brothers Brewing Company, an Oregon corporation (“Widmer”)

929 N. Russell

Portland, Oregon 97227
	and:
	 	 
	 

	 	Craft Brands Alliance LLC, an Oregon limited liability company (“CBA”)

929 N. Russell

Portland, Oregon 97227
	and:
	 	 
	 

	 	Redhook Ale Brewery Incorporated, a Washington corporation (“Redhook”)

14300 NE 145th Street

Woodinville, Washington 98072
	 
	 	 
	Date:

	 	June 2005

                    This Amendment No. 1 to Licensing Agreement (“Agreement”) is entered into by and between
Widmer and Redhook as of the date first set forth above.

BACKGROUND

          A. Pursuant to the Licensing Agreement between Widmer and Redhook dated February 1, 2003 (the
“Licensing Agreement”), Redhook is manufacturing Widmer Hefeweizen product (the “Widmer Product”)
at its Portsmouth facility and distributing the Widmer Product in the states of Maine, Vermont, New
Hampshire, Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania, Ohio, Maryland, New
Jersey, Delaware, West Virginia, Virginia, North Carolina, South Carolina, Kentucky, Tennessee,
Georgia, Alabama, Mississippi, Florida, Wisconsin, Michigan, Indiana, Illinois, and Washington D.C.
(the “Initial Redhook Territory”).

          B. Pursuant to that certain Supply, Distribution, and Licensing Agreement by and between
Widmer and CBA dated July 1, 2004, Widmer granted to CBA certain exclusive rights to expand its
distribution to include the additional states of Iowa, Kansas, Minnesota, Missouri, Nebraska, North
Dakota, and South Dakota (referred to herein as “Region 6”).

          C. Widmer and Redhook desire to amend the Licensing Agreement to permit Redhook to
manufacture, bottle, and package additional Widmer Product at Redhook’s Portsmouth Facility and to
advertise, market, and distribute the Widmer Product for sale in Region 6 through the distribution
system established by Anheuser-Busch, Inc. on the terms and conditions set forth herein.

AGREEMENT

                    Based on the mutual promises set forth below and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

               1.1 Expansion of Territory. The term “Territory” as used in the Licensing Agreement
is defined to also include the states in Region 6.

-1-

 

               1.2 Approvals. If Redhook has not obtained all licenses and approvals necessary and
commenced selling Widmer Product in any state located within the Region 6 by the third anniversary
date of this Amendment, Widmer may modify the Territory to eliminate such state from the Territory
if (a) Widmer notifies Redhook of Widmer’s intent to modify the Territory to eliminate a state (the
“Elimination Notice”) and (b) Redhook fails, within 45 days from the date of the Elimination
Notice, to obtain all necessary licenses to sell the Widmer Product in the state or fails make any
sales of Widmer Product in such state.

     2. Brand Management. Redhook will comply with the brand management guidelines set
forth on Exhibit C, attached to the Licensing Agreement. In addition, Redhook will employ
a market manager (the “Region 6 Market Manager”) who will be responsible for ensuring Redhook’s
compliance with the brand management guidelines in Region 6. The initial Region 6 Market Manager
will be located in either St. Louis, Missouri, or Kansas City, Missouri. Any replacement Region 6
Market Manager shall be a knowledgeable and experienced beer market manager with comparable
qualifications as the initial Region 6 Market Manager. Redhook shall introduce any replacement
Region 6 Market Manager to Widmer in advance of employment if requested by Widmer.

     3. Royalties.   Redhook will pay Widmer royalties for sales of Widmer Products in
Region 6 (collectively, the “Region 6 Royalties”) as follows:

	 	 	 	 	 
	 	 	Region 6 Royalties Through	 	Region 6 Royalties Following
	Volume	 	December 31, 2005	 	December 31, 2005
	0-41,340 PCEs

	 	$0.00 PCE if sales are
less than 41,340 PCE
	 	$0.25 PCE
	 
	 	 	 	 
	 

	 	$0.25 if sales are 41,340 PCE or greater	 	 
	 
	 	 	 	 
	41,341-68,900 PCEs

	 	$0.75 PCE
	 	$0.75 PCE
	 
	 	 	 	 
	Over 68,900 PCEs

	 	$1.00 PCE
	 	$1.00 PCE

               3.1 The Region 6 Royalty rates set forth above shall be adjusted as follows:

	 	(i)	 	for purposes of this Section 3.1, “Net Sales Price”
equals the weighted average gross wholesale price charged by Redhook for
the Widmer Product, minus the weighted-average excise taxes, Margins, and
discounts. “Margins” are those fees identified as “Margins” payable by
Redhook to Anheuser-Busch, Inc. (“ABI”) under its Distribution Agreement
with ABI. The “Base Net Sales Price” shall be Net Sales Price upon which
increases or decreases are computed. The initial Base Net Sales Price
shall be the Net Sales Price as of December 31, 2004. Whenever an
adjustment is made under this Section 4.2, the Net Sales Price which
triggered the increase or decrease shall be the Base Net Sales Price for
the next adjustment.

-2-

 

	 	(ii)	 	for aggregate increases or decreases in the Net Sales
Price after December 31, 2004, which are greater than a 2% increase or
decrease over the Base Net Sales Price then in effect, the Royalty Rates
will increase or decrease by the same percentage change; provided, however,
that in no event will the Royalty Rates decrease below the amounts set
forth in Section 4.1 above.

                     3.2 The Net Sales Price shall be calculated as of December 31 of each calendar year and
compared to the Net Sales Price as of December 31 of the immediately preceding year. Any Royalty
rate adjustment shall be applied to all Widmer Product delivered in the calendar year immediately
following the calendar year the Net Sales Price increases or decreases by at least 2%.

                     3.3 Reports.  On or before the thirtieth (30th) day of the calendar month
following the end of each calendar quarter, Redhook shall pay to Widmer Region 6 Royalties accrued
in such calendar quarter. Such payment shall be accompanied by a report setting forth (a) the
aggregate actual sales volume of the Widmer Product by Redhook in Region 6 for such period, (b) the
Region 6 Royalties payable hereunder, and (c) such other detail as Widmer may reasonably request.

                     3.4 Partial Periods. If a period for which the Region 6 Royalties are due is less
than a full calendar quarter or calendar year, then the obligation for such period shall be
adjusted based on the number of days in such period relative to the number of days in such calendar
quarter or calendar year.

                     3.5 Books and Records.  Redhook shall maintain such books and records as are necessary
to establish the accuracy of the reports submitted under Section 4.4 for a period of three years
from the date of submission of such reports. For purposes of verifying the accuracy of Region 6
Royalties paid by Redhook hereunder, such books and records shall be made available to Widmer
during regular business hours, at the location where such books and records are normally
maintained, for audit by Widmer or its designee. Such audits may be made once during each
six-month period. The costs incurred in connection with the audit shall be paid by Widmer;
provided, however, that Redhook shall pay such fees and expenses if the audit reveals an
underpayment of royalties of more than five percent in any calendar quarter.

     4. Notices.  Any notice, request or demand to be given or made under this Agreement
shall be in writing and shall be deemed to have been duly given or made (i) upon delivery, if
delivered by hand and addressed to the party for whom intended at the address listed below,
(ii) ten (10) days after deposit in the mails, if sent certified or registered air mail (if
available) with return receipt requested, or five (5) days after deposit if deposited for delivery
with a reputable courier service, and in each case addressed to the party for whom intended at the
address listed below or (iii) upon completion of transmission, if sent by facsimile transmission to
the party for whom intended at the fax number listed below, provided that a copy of the facsimile
transmission is promptly deposited for delivery by one of the methods listed in (i) or (ii) above:

-3-

 

	 	 	 	 	 	 	 
	 

	 	If to Widmer, to:	 	 	 	 
	 

	 	 	 	 	 	Widmer Brothers Brewing Company
	 

	 	 	 	 	 	929 N. Russell
	 

	 	 	 	 	 	Portland, Oregon 97227
	 

	 	 	 	 	 	Attn: Kurt Widmer
	 

	 	 	 	 	 	Fax: 503-281-1496
	 
	 	 	 	 	 	 
	 

	 	If to CBA, to:	 	 	 	 
	 

	 	 	 	 	 	Craft Brands Alliance LLC
	 

	 	 	 	 	 	929 N. Russell
	 

	 	 	 	 	 	Portland, Oregon 97227
	 

	 	 	 	 	 	Attn: Terry Michaelson
	 

	 	 	 	 	 	Fax: 503-281-1496
	 
	 	 	 	 	 	 
	 

	 	If to Redhook, to:	 	 	 	 
	 

	 	 	 	 	 	Redhook Ale Brewery Incorporated
	 

	 	 	 	 	 	14300 NE 145th Street
	 

	 	 	 	 	 	Woodinville, Washington 98072
	 

	 	 	 	 	 	Attn: David Mickelson
	 

	 	 	 	 	 	Fax: 425-485-0761

Any party may change its address and/or fax number for the purposes of this Section 13 by written
notice hereunder given to the other parties at least ten (10) days prior to the effective date of
such change.

     5. CBA’s Consent; Rights. CBA hereby consents to adding Region 6 to the Territory on
the terms and conditions set forth in this Amendment. Notwithstanding the foregoing, however, upon
60 days prior written notice to Redhook and Widmer, CBA may, without creating any liability to
Redhook, remove the states in Region 6 from the Territory, subject to the terms and conditions set
forth in the Amendment No. 1 to Restated Operating Agreement of CBA of even date herewith, a form
of which is attached as Exhibit A.

     6. Other Terms. All other terms and conditions in the Licensing Agreement not
expressly modified herein remain in full force and effect.

     7. Counterparts. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one agreement.

-4-

 

     The parties have executed this Agreement as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	WIDMER BROTHERS BREWING COMPANY	 	 	 	REDHOOK ALE BREWERY INCORPORATED	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kurt Widmer	 	 	 	By:	 	/s/ David J. Mickelson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	Kurt Widmer	 	 	 	Name:	 	David J. Mickelson	 	 
	Title:

	 	President	 	 	 	Title:	 	EVP / CFO / COO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CRAFT BRANDS ALLIANCE LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Terry E. Michaelson	 		 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 Terry E. Michaelson	 	 	 	 	 	 	 	 
	Title:
	 	President	 	 	 	 	 	 	 	 

-5-

 

EXHIBIT A

AMENDMENT NO. 1 TO RESTATED OPERATING AGREEMENT OF CBA

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]