Document:

exv10w36

 

EXHIBIT
10.36

SEPARATION AGREEMENT AND RELEASE

     THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is entered into by John J. Lennon
(hereinafter referred to as “Employee”) and Pyramid Breweries Inc., its affiliates, officers,
directors and managers (hereinafter referred to as “Pyramid”).

RECITALS

     A. Employee has been employed by Pyramid in the position of President and Chief Executive
Officer, and Employee’s employment at Pyramid will terminate effective June 30, 2006 (the
“Termination Date”).

     B. Employee and Pyramid are parties to that certain Employment Agreement dated as of July 15,
2004 (the “Employment Agreement”). This Agreement is entered into pursuant to Section 12(a)(i) of
the Employment Agreement.

     C. Each of the undersigned parties to this 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 Agreement knowingly and intelligently without duress or
coercion from any source. Employee has had a reasonable time in which to consider whether he
wished to sign this Agreement.

AGREEMENTS

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises contained
below, it is agreed as follows:

     1. EMPLOYMENT: ENDING DATE AND RESPONSIBILITIES

     Employee’s employment with Pyramid will end effective as of June 30, 2006. Effective that
date, he has no further employment duties to Pyramid other than those duties which survive his
separation from employment under the confidentiality, unfair competition and nonraiding of
employees provisions in Paragraphs 13 and 15 of the Employment Agreement.

     2. CONSIDERATION

     In exchange for the promises contained in Paragraph 3 below, Pyramid will provide Employee
with the payments and benefits provided under the Employment Agreement:

     (a) Employee’s salary (less customary withholdings for taxes and health benefits), car
allowance, and medical, dental and eye coverage (“health benefits”) through July 14, 2006 (pursuant
to Section 12(a)(ii) of the Employment Agreement;

     (b) One year’s salary ($260,000), less customary withholdings for taxes and health benefits,
for the period from July 15, 2006 through July 15, 2007 (pursuant to Section 12(a)(i) of the
Employment Agreement);

 

 

     (c) 35,000 shares of Pyramid’s common stock (pursuant to Section 5(c)(i) and (ii) of the
Employment Agreement); and

     (d) Continuation, at Pyramid’s cost, of Pyramid’s health benefits, including medical, dental
and eye care, to Employee and his qualifying family members through July 15, 2007, with continuing
COBRA eligibility thereafter.

     In addition, Pyramid acknowledges and agrees that the forfeiture restrictions contemplated in
Section 5(c) of the Employment Agreement shall not apply to the 35,000 shares referred to in
Section 2(c) above and shall lapse with respect to the 70,000 shares of Pyramid common stock that
were granted to Employee under Section 5(c) of the Employment Agreement as of January 1, 2006 (the
“2006 Shares”). Pyramid agrees to promptly issue, or cause to be issued, the shares referred to in
Section 2(c) above and to reissue, or cause to be reissued, the 2006 Shares without the legends
relating to forfeiture restrictions that were contained on the certificates evidencing such shares.

     In addition to the compensation referred to above, Employee shall be entitled to (i) payment
for Employee’s earned but unused vacation through July 14, 2006, less customary tax and other
withholdings, and (ii) Employee’s 2005 bonus pursuant to the Officer Incentive Compensation Plan
(“2005 OICP”) in the amount of $87,164, less customary tax and other withholdings.

     As contemplated in the Company’s 2006 Officer Incentive Compensation Plan (“2006 OICP”), if
the performance goals under the 2006 OICP relating to the incentive compensation of the CEO (“CEO
Bonus”) are actually achieved for 2006, Employee shall be entitled to one-half of the CEO Bonus,
payable at the same time as bonuses to other management employees are made under the 2006 OICP.
Pyramid shall not amend the 2006 OICP in a manner which adversely affects the Employee without the
Employee’s prior written consent.

     Employee shall be entitled to retain the Pyramid laptop computer and cell phone previously
used by Employee in the course of his employment, along with continued rights to use the cell
telephone number, with Employee bearing all related expenses after July 14, 2006. Employee
understands and acknowledges that all information and data of any nature whatsoever belonging to
Pyramid or relating to its business shall be removed from the laptop and cell phone and Employee
shall cooperate with Pyramid to ensure that such removal is effected.

     Employee and Pyramid agree that the consideration set forth above is the consideration offered
for this release in Paragraph 12 the Employment Agreement, and is not required by Pyramid’s
policies or procedures or by any other preexisting contractual obligation of Pyramid or by any
statute, regulation or ordinance, and is offered by Pyramid solely as consideration for this
Agreement.

     3. GENERAL RELEASE OF CLAIMS

     Except for claims arising from the provisions of this Agreement, Employee expressly waives any
claims against Pyramid (including, for purposes of this Paragraph 3, all affiliates,

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subsidiaries, officers, directors, managers, employees, agents, assigns and representatives)
and releases Pyramid (including its affiliates, subsidiaries, officers, directors, managers,
employees, agents, assigns and representatives) from any claims, whether known or unknown, which
existed or may have existed at any time up to the date of this Agreement, including claims related
in any way to Employee’s employment with Pyramid or the ending of that relationship. Except as
expressly set forth in this Agreement, this release includes, but is not limited to, any claims for
wages, bonuses, employment benefits, or damages of any kind whatsoever, arising out of any common
law torts, arising out of any contracts, express or implied, any covenant of good faith and fair
dealing, express or implied, any theory of wrongful discharge, any theory of negligence, any theory
of retaliation, any theory of discrimination or harassment in any form, any legal restriction on
Pyramid’s right to terminate employees, or any federal, state, or other governmental statute,
executive order, or ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964 as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
Americans with Disabilities Act, the Age Discrimination in Employment Act (ADEA), the Older Workers
Benefit Protection Act, the Family and Medical Leave Act, the Employee Retirement Income Security
Act, the Washington Law Against Discrimination, or any other legal limitation on or regulation of
the employment relationship. The waiver and release of claims under the ADEA contained in this
Agreement does not cover rights or claims that may arise after the date on which Employee signs
this Agreement. Employee hereby acknowledges and agrees that his knowing and voluntary waiver and
release of his rights and claims in exchange for consideration (something of value) that is in
addition to anything of value to which he is already entitled.

     In exchange for the foregoing release by Employee, Pyramid hereby releases and forever
discharges Employee and his marital community from and against any and all claims, demands or
causes of action of any nature whatsoever, whether known or unknown, arising from or in any way
connected with Employee’s relationship with Pyramid whether based in tort, contract, or any
federal, state or local law, statute or regulation, arising through the date of this Agreement;
provided, however, that the foregoing shall not release Employee from any obligations assumed or
reaffirmed under this Agreement or for any willful misconduct or fraud of Employee.

     The parties represent and warrant that each is the sole owner of the actual or alleged claims,
rights, causes of action, and other matters which are released herein, that the same have not been
assigned, transferred, or disposed of in fact, by operation of law, or in any manner, and that such
party has the full right and power to grant, execute and deliver the releases, undertakings, and
agreements contained herein.

     4. NO ADMISSION OF WRONGDOING

     This Agreement shall not be construed as an admission by either party of any wrongful act,
unlawful discrimination, or breach of contract, and each party specifically disclaims any liability
to or discrimination against Pyramid, Employee or any other person.

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     5. CONFIDENTIALITY OF SEPARATION AGREEMENT/NONDISPARAGEMENT

     The parties agree that they will keep the terms of this Agreement (including, but not limited
to, the payments pursuant to Paragraph 2) completely confidential, and that neither party will
disclose any information concerning this Agreement or its terms to anyone other than Employee’s
spouse or domestic partner, the parties’ respective legal counsel, tax advisors, accountants and/or
financial advisors, who will be informed of and bound by this confidentiality clause, within
Pyramid’s senior management and except as required by court order or by applicable law (including
federal securities laws and regulations). In the event either party is requested, by court order
or any other legal process, to provide information covered by this confidentiality obligation, that
party agrees to immediately notify the other party of any such request.

     The parties agree that neither party shall make disparaging remarks with regard to the other
party.

      6. REAFFIRMATION OF CONFIDENTIALITY, UNFAIR COMPETITION AND NONRAIDING OF
EMPLOYEES AGREEMENTS

     Employee expressly reaffirms and incorporates herein as part of this Agreement the
post-employment provisions of the confidentiality, unfair competition and nonraiding of employees
provisions in Paragraphs 13 and 15 of the Employment Agreement, a copy of which was given to
Employee, and which provisions shall remain in full effect.

     7. SEVERABILITY

     The provisions of this Agreement are severable, and if any part of it is found to be unlawful
or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable
to the maximum extent consistent with applicable law.

     8. ENTIRE AGREEMENT

     This Agreement, and the Employment Agreement that is incorporated herein by reference, sets
forth the entire understanding between Employee and Pyramid and supersedes any prior agreements or
understandings, express or implied, pertaining to the terms of Employee’s employment with Pyramid
and the employment relationship. Each party acknowledges that in executing this Agreement, such
party does not rely upon any representation or statement by the other party or its or his
representatives concerning the subject matter of this Agreement, except as expressly set forth in
the text of the Agreement. No modification or waiver of this Agreement will be effective unless
evidenced in a writing signed by both parties.

     9. GOVERNING LAW

     This Agreement will be governed by and construed exclusively in accordance with the laws of
the State of Washington without reference to its choice of law principles. Any

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disputes arising under this Agreement shall be brought in a court of competent jurisdiction in
the State of Washington.

     10. KNOWING AND VOLUNTARY AGREEMENT

     Employee agrees that Employee has carefully read and fully understands all aspects of this
Agreement including the fact that this Agreement releases any claims that Employee might have
against Pyramid, except for specifically reserved rights and claims, as provided herein. Employee
agrees that Employee has been advised to consult with an attorney prior to executing the Agreement,
and that Employee has either done so or knowingly waived the right to do so, and now enters into
this Agreement without duress or coercion from any source. Employee agrees that he has been
provided the opportunity to consider for twenty-one (21) days whether to enter into this Agreement,
and has voluntarily chosen to enter into it on this date. Employee may revoke this Agreement for a
period of seven (7) days following the execution of this Agreement; this Agreement shall become
effective following expiration of this seven (7) day period.

     11. RESIGNATION FROM PYRAMID BOARD; INDEMNIFICATION

     Employee hereby resigns from the Board of Directors of Pyramid, effective as of June 30, 2006.
Nothing herein shall affect any right to defense or indemnification or advancement of expenses to
which Employee is entitled to in connection with his role as an employee, agent, director or
officer of Pyramid, whether pursuant to the Washington Business Corporation Act, Pyramid’s articles
of incorporation or bylaws, or contract, including his Employment Agreement or any policy of
insurance.

     12. COUNTERPARTS

     This Agreement may be executed in any number of counterparts, all of which together shall for
all purposes constitute one agreement, binding on all the parties, notwithstanding that all the
parties have not signed the same counterpart.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below.

	 	 	 	 	 	 	 
	Pyramid Breweries, Inc.	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ George Hancock
	 	/s/ John J. Lennon	 	 
	 

	 	 

	 	 

John J. Lennon
	 	 
	Its:

	 	Chairman	 	 	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	Dated: July 3, 2006	 	Dated: July 3, 2006	 	 

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Exhibit 10.37

PYRAMID BREWERIES INC.

RESTRICTED STOCK AWARD AGREEMENT

(Annual Stock Award)

     Pyramid Breweries Inc., a Washington corporation (the “Company”), has granted you an award of
shares of restricted common stock of the Company (the “Stock Award”). This Stock Award is made
under the Company’s 2004 Equity Incentive Plan (the “Plan”) on the following terms, subject to the
terms and conditions of the Plan.

     The terms of the Stock Award are as set forth in this Restricted Stock Award Agreement (the
“Agreement”), and to the extent not inconsistent with this Agreement, the Plan. Capitalized terms
that are not defined in this Agreement have the meanings given to them in the Plan. The basic
terms of the Stock Award are summarized as follows:

	 	 	 	 	 
	Grant Date:
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Number of Shares
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Fair Market Value Per Share on Grant Date:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Vesting Commencement Date:
	 	 	 	 
	 
	 	 	 

1. Vesting

     (a) The Stock Award is subject to forfeiture upon termination of your service with the Company
(or a Parent or Subsidiary) as described below. The Stock Award will vest and no longer be subject
to forfeiture according to the following schedule:

	 	 	 	 	 
	Period of Your Continuous Service
With
 the Company from the Vesting 

Commencement Date

	 	Portion of Stock Award
 No Longer
Subject to
 Forfeiture	 	 
	 

	 	 

	 	 

     (b) Shares that have not vested and remain subject to forfeiture under the preceding schedule
are referred to herein as “Unvested Shares.” The Unvested Shares will vest (and to the extent so
vested cease to be Unvested Shares remaining subject to forfeiture) in accordance with the above
schedule. Collectively, the Unvested Shares and any vested shares are referred to herein as the
“Shares.”

     (c) Early lapse of the forfeiture restrictions may occur under certain circumstances as
described below.

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2. Termination of Service

     If your Service terminates for any reason, any portion of this Stock Award that has not vested
as provided in Sections 1 and 3 of this Agreement will immediately terminate. You will be required
to forfeit all Unvested Shares upon such occurrence without the payment of any further
consideration to you, subject to Section 3 below. As security for the faithful performance by you
of the terms of this Agreement and to ensure the availability for delivery of Unvested Shares upon
forfeiture, the Company or its transfer agent shall hold all certificates representing Unvested
Shares, together with an adequate number of undated and otherwise blank stock powers executed by
you. The Company shall have the right to cause transfers of such Unvested Shares to be effected
pursuant to this Section 2.

3. Accelerated Vesting

     If your employment is terminated by the Company without “Cause” by you for “Good Reason,” or
as a result of your death or Disability, each as defined in and pursuant to the terms of the Plan
and the Amended 2006 Compensation Package, the forfeiture restriction will lapse with respect to a
prorated portion of the Annual Installment for the year in which such termination occurs based on
the date your employment is terminated. In the event of a Company Transaction or Change in
Control, this Stock Award will be governed by the terms of the Plan. In summary, this generally
means that in a Change in Control, or in a Company Transaction in which the surviving company does
not generally assume the Company’s rights and obligations with respect to outstanding awards under
the Plan, the Shares will become fully vested and no longer subject to forfeiture.

4. Consideration

     The Company acknowledges your payment of full consideration for this Stock Award in the form
of services previously rendered (in an amount equal to no less than the aggregate par value of the
Shares) and services to be rendered hereafter to the Company.

5. Transfer Restrictions

     Unvested Shares may not be sold, transferred, assigned, pledged, encumbered or otherwise
disposed of in contravention of the provisions of this Agreement.

6. Securities Law Compliance

     Notwithstanding any other provision of this Agreement, you may not sell the Shares unless they
are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such
Shares are not then so registered, the Company has determined that such sale would be exempt from
the registration requirements of the Securities Act. The sale of the Shares must also comply with
other applicable laws and regulations governing the Shares, and you may not sell the Shares if the
Company determines that such sale would not be in material compliance with such laws and
regulations.

 

 

7. Section 83(b) Election for Stock Award

     You understand that under Section 83(a) of the Code, the excess of the Fair Market Value of
the Unvested Shares on the date the forfeiture restrictions lapse over the purchase price, if any,
paid for such Shares will be taxed, on the date such forfeiture restrictions lapse, as ordinary
income subject to payroll and withholding tax and tax reporting, as applicable. For this purpose,
the term “forfeiture restrictions” means the right of the Company to receive back any Unvested
Shares upon termination of your Services. You understand that you may elect under Section 83(b) of
the Code to be taxed at the time the Unvested Shares are acquired, rather than when and as the
Unvested Shares cease to be subject to the forfeiture restrictions. Such election (an “83(b)
Election”) must be filed with the Internal Revenue Service within 30 days from the Grant Date of
the Stock Award. Even if the Fair Market Value of the Unvested Shares on the Grant Date equals the
purchase price, if any, (and thus no tax is payable), you must file the election within the 30-day
period to avoid the risk of adverse tax consequences in the future.

     You understand that (a) you will not be entitled to a deduction for any ordinary income
previously recognized as a result of the 83(b) Election if the Unvested Shares are subsequently
forfeited to the Company and (b) the 83(b) Election may cause you to recognize more ordinary income
than you would have otherwise recognized if the value of the Unvested Shares subsequently declines.

     YOU UNDERSTAND THAT FAILURE TO FILE SUCH AN 83(B) ELECTION WITHIN THE 30-DAY PERIOD MAY RESULT
IN THE RECOGNITION OF ORDINARY INCOME BY YOU AS THE FORFEITURE RESTRICTIONS LAPSE. You further
understand that an additional copy of such election form should be filed with your federal income
tax return for the calendar year in which the date of this Agreement falls. You acknowledge that
the foregoing is only a summary of the federal income tax laws that apply to the purchase of the
Unvested Shares under this Agreement and does not purport to be complete. YOU FURTHER ACKNOWLEDGE
THAT THE COMPANY HAS DIRECTED YOU TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF
THE CODE AND THE INCOME TAX LAWS OF ANY MUNICIPALITY OR STATE IN WHICH YOU MAY RESIDE.

     You agree to execute and deliver to the Company with this Agreement a copy of the
Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the “Acknowledgment”)
attached hereto as Exhibit A. You further agree that you will execute and deliver to the
Company with this Agreement a copy of the 83(b) Election attached hereto as Exhibit B if
you choose to make such an election.

     You agree to deliver a Stock Power and Assignment Separate from Certificate in the form
attached as Exhibit C (with the name of the transferee, number of shares, certificate
number and date left blank), executed by you and your spouse, if any, along with any certificate(s)
evidencing shares of Restricted Stock issued to you, to the Secretary of the Company or its
designee (“Escrow Holder”). YOU HEREBY APPOINT THE ESCROW HOLDER TO HOLD SUCH STOCK POWER AND ANY
SUCH CERTIFICATE(S) IN ESCROW AND TO TAKE ALL SUCH ACTIONS, AND TO EFFECTUATE ALL SUCH

 

 

TRANSFERS AND/OR RELEASES OF SUCH SHARES, AS ARE REQUIRED TO EFFECTUATE THE TERMS OF THIS
AWARD. The foregoing appointment is a power coupled with an interest and may not be revoked by you.
You and the Company agree that any Escrow Holder will not be liable to any party to any person for
any actions or omissions, unless Escrow Holder is grossly negligent relative thereto. Escrow Holder
may rely on any letter, notice or other document executed by any signature purported to be genuine
and may rely on advice of counsel and obey any order of any court with respect to the transactions
by this Agreement. Shares of Restricted Stock subject to this Award shall be released to you from
escrow as they Vest.

8. Legends

     You understand and agree that the Shares are subject to forfeiture as set forth in this
Agreement. You understand that the certificate(s) representing the Shares may bear legends in
substantially the following form:

     “The securities represented by this certificate are subject to certain forfeiture rights held
by the issuer and/or its assignee(s) and may not be sold, assigned, transferred, encumbered or in
any way disposed of except as set forth in a stock award agreement between the issuer and the
original purchaser of these shares, a copy of which may be obtained at the principal office of the
issuer. Such transfer restrictions and/or forfeiture rights are binding on transferees of these
shares.”

9. Stop-Transfer Notices

     You understand and agree that, in order to ensure compliance with the restrictions referred to
in this Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer
agent, if any, and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records. The Company will not be required to (a) transfer
on its books any Shares that have been sold or transferred in violation of the provisions of this
Agreement or (b) treat as the owner of the Shares, or otherwise accord voting, dividend or
liquidation rights to, any transferee to whom the Shares have been transferred in contravention of
this Agreement.

10. Independent Tax Advice

     You acknowledge that determining the actual tax consequences to you of receiving or disposing
of the Shares may be complicated. These tax consequences will depend, in part, on your specific
situation and may also depend on the resolution of currently uncertain tax law and other variables
not within the control of the Company. You are aware that you should consult a competent and
independent tax advisor for a full understanding of the specific tax consequences to you of
receiving or disposing of the Shares. Prior to executing this Agreement, you either have consulted
with a competent tax advisor independent of the Company to obtain tax advice concerning the Shares
in light of your specific situation or have had the opportunity to consult with such a tax advisor
but chose not to do so.

 

 

11. Withholding and Disposition of Shares

     You agree to make arrangements satisfactory to the Company for the payment of any federal,
state, local or foreign withholding tax obligations that arise either upon the Grant Date or as the
forfeiture restrictions on any Shares lapse, and you acknowledge that the Company shall not have
any obligation to deliver the Shares until you have made such arrangements. Notwithstanding the
previous sentence, you acknowledge and agree that the Company and any Parent or Subsidiary has the
right to deduct from payments of any kind otherwise due to you any federal, state or local taxes of
any kind required by law to be withheld with respect this Stock Award.

12. General Provisions

     12.1 Assignment. The Company may assign its rights under this Agreement at any time, whether
or not such rights are then exercisable, to any person or entity selected by the Company’s Board of
Directors, including, without limitation, one or more stockholders of the Company.

     12.2 Notices. Any notice required in connection with this Agreement will be given in writing
and will be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered or
certified, postage prepaid and addressed to the party entitled to such notice by 10 days’ advance
written notice under this Section 12.2 to all other parties to this Agreement.

     12.3 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing
and signed by the person against whom such waiver is sought to be enforced, nor will failure to
enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other
right hereunder.

     12.4 Undertaking. You hereby agree to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable in order to carry out or effect
one or more of the obligations or restrictions imposed on either you or the Shares pursuant to the
express provisions of this Agreement.

     12.5 Agreement Is Entire Contract. This Agreement constitutes the entire contract between the
parties hereto with regard to the subject matter hereof.

     12.6 Successors and Assigns. The provisions of this Agreement will inure to the benefit of,
and be binding on, the Company and its successors and assigns and you and your legal
representatives, heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person will have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.

     12.7 No Employment or Service Contract. This Agreement does not confer upon you any right
with respect to continuance of employment by the Company or any Parent or Subsidiary, nor does it
interfere in any way with the right of your employer to terminate your employment or services at
any time.

 

 

     12.8 Stockholder of Record. As of the Grant Date, you will be recorded as a stockholder of
the Company and will have, subject to the provisions of this Agreement, all the rights of a
stockholder with respect to the Shares.

     12.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which
will be deemed an original, but which, upon execution, will constitute one and the same instrument.

     12.10 Governing Law. This Agreement will be construed and administered in accordance with and
governed by the laws of the State of Washington.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year indicated
above on the first page of this Agreement as the Grant Date.

	 	 	 	 	 	 	 	 	 
	COMPANY	 	PYRAMID BREWERIES INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	GRANTEE
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 

	 	Social Security No.:	 	 	 	 
	 

	 	 	 	 

	 	 

 

 

EXHIBIT A

ACKNOWLEDGMENT AND STATEMENT OF DECISION REGARDING SECTION 83(b) ELECTION

     The undersigned, a recipient of                      shares of common stock of Pyramid Breweries Inc.,
a Washington corporation (the “Company”), pursuant to a Stock Award, hereby states as follows:

     1. The undersigned acknowledges receipt of a copy of the Stock Award Agreement (the
“Agreement”) which the undersigned has carefully reviewed.

     2. The undersigned either (check and complete as applicable):

	 	(a)	       	has consulted, and has been fully advised by, the
undersigned’s own tax advisor regarding the federal, state and local tax
consequences of receiving the Stock Award and particularly regarding the
advisability of making an election pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), and pursuant to the
corresponding provisions, if any, of applicable state law, or
	 
	 	(b)	       	has knowingly chosen not to consult such a tax advisor.

     3. The undersigned hereby states that the undersigned has decided (check as applicable)

	 	(a)	       	to make an election pursuant to Section 83(b) of the Code,
and is submitting to the Company, together with the undersigned’s executed
Stock Award Agreement, an executed form entitled “Election Under Section 83(b)
of the Internal Revenue Code of 1986”, or
	 
	 	(b)	       	not to make an election pursuant to Section 83(b) of the
Code.

     4. Neither the Company nor any representative of the Company has made any warranty or
representation to the undersigned with respect to the tax consequences of the undersigned’s receipt
of the shares or of the making or failure to make an election pursuant to Section 83(b) of the Code
or the corresponding provisions, if any, of applicable state law.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 

 

 

EXHIBIT B

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue
Code, to include in taxpayer’s gross income for the current taxable year the amount of any
compensation taxable to taxpayer in connection with taxpayer’s receipt of the property described
below:

	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned are as
follows:

	 
	 	 	NAME OF TAXPAYER:                
                   
      
	 
	 	 	ADDRESS:                  
                   
                   
               
	 
	 
	 	 	                  
                 
                   
                   
               
	 
	 	 	IDENTIFICATION NO. OF TAXPAYER:                     
	 
	 	 	TAXABLE YEAR:                     
	 
	2.	 	The property with respect to which the election is made is described as follows:                     
 shares of the common stock of Pyramid Breweries Inc., a Washington corporation (the
“Company”).
	 
	3.	 	The date on which the property was transferred is:                     
	 
	4.	 	The property is subject to the following restrictions:
	 
	5.	 	The aggregate fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of such property is:
$                    .
	 
	6.	 	The amount (if any) paid for such property is: $0

     The undersigned has submitted a copy of this statement to the person for whom the services
were performed in connection with the undersigned’s receipt of the above-described property. The
undersigned is the person performing the services in connection with the transfer of said property.

     The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 

 

 

EXHIBIT C

STOCK POWER AND ASSIGNMENT

SEPARATE FROM CERTIFICATE *

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                   
                   
  ,                  
    shares of the common stock of Pyramid Breweries Inc., a Washington
corporation, standing in the undersigned’s name on the books of said corporation represented by
Certificate(s) No.                 
                   
                   
      delivered herewith, and does hereby irrevocably
constitute the Secretary of said corporation as attorney-in-fact, with full power of substitution,
to transfer said stock on the books of said corporation.

Dated:                                         

	 	 	 	 	 
	Taxpayer	 	 	 	 
	 	 	 
	 

	 	Print Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Spouse	 	 	 	 
	 	 	 
	 

	 	Print Name:	 	 
	 

	 	 	 	 

 

			
	*	 	GRANTEE AND HIS SPOUSE SHOULD SIGN THIS STOCK POWER AND ASSIGNMENT SEPARATE FROM
CERTIFICATE, BUT LEAVE BLANK THE NAME OF THE TRANSFEREE, NUMBER OF SHARES, CERTIFICATE NUMBER AND
DATE.

 

 

DISTRIBUTION OF COPIES

	1.	 	File original with the Internal Revenue Service Center where the taxpayer’s income tax return
will be filed. Filing must be made by no later than 30 days after the date the property was
transferred.

	2.	 	Attach one copy to the taxpayer’s income tax return for the taxable year in which the
property was transferred.
	 
	3.	 	Mail one copy to the Company at the following address:

Pyramid Breweries Inc.

91 S Royal Brougham Way

Seattle, WA 98134

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