March 29, 2010
Craft Brewers Alliance, Inc.
929 North Russell Street
Portland, OR 97227
The purpose of this letter is to set forth our understanding about your employment as the Vice
President of Marketing of Craft Brewers Alliance, Inc. (the Company), effective April 1, 2010.
This letter supersedes and replaces any prior offer letter or other agreement regarding your
employment by the Company.
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 $150,000 (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 Companys employee benefit programs for which you are eligible, including
long-term incentive awards approved by the Compensation Committee for executive officers from 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 Companys Compensation Committee or Board of Directors.
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 continue to pay your
monthly base salary at the rate in effect on the date of termination in accordance with the Companys normal
payroll schedule commencing on the day following termination and extending for a period (the Severance Period) equal to
two weeks for each full year of service you have accrued with the Company through the date of termination (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 12 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 Companys PTO Plan
then in effect.
If you become entitled to severance benefits under this agreement, the Company will also
continue to provide you during the Severance Period 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 Companys Code of Conduct and 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 Companys 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 Companys Vice President of Marketing; (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 Companys 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 Companys controlled group within 90 days of the date of your
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 Companys Code of Conduct and Ethics as
in effect from time to time, and to be subject to the Companys policies and procedures in effect
from time to time for senior executives of the Company.
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.
/s/ Terry Michaelson
Chief Executive Officer
Acknowledged and Agreed:
/s/ Danielle Katcher
Date: March 29, 2010