Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
On November 29, 2019, Craft Brew Alliance, Inc. (the "Company"), entered into
amended and restated employment agreements with Andrew J. Thomas, Chief
Executive Officer, J. Scott Mennen, Chief Operating Officer, Christine N.
Perich, Chief Financial and Strategy Officer, Derek Hahm, Vice President, Sales
and Edwin A. Smith, Corporate Controller and Principal Accounting Officer.
The material changes to the employment agreements with Messrs. Thomas, Mennen
and Hahm and Ms. Perich include the following:
Ÿ Extending from one to two years the period, following a change in control
("CIC Protection Period"), during which the named executive officer is
entitled to enhanced severance upon a termination without cause or for good
Ÿ Clarifying that severance calculations during the CIC Protection Period are
calculated without regard to any reductions in compensation following a change
in control; and
Ÿ Revising the definitions of "cause" and "good reason" to provide for a more
objective standard, and, in the case of the definition of "cause," to include
The amended and restated employment agreement with Mr. Smith eliminated the
enhanced severance that applied upon a qualifying termination of employment
following a change in control of the Company.
The Company also entered into agreements providing for cash-based retention
awards with Messrs. Thomas ($1,250,000), Mennen ($350,000) and Smith ($170,000)
and Ms. Perich ($350,000). The Company will pay the retention awards to Messrs.
Thomas and Mennen and Ms. Perich prior to December 31, 2019; provided that each
of the award recipients will be required to repay the after-tax portion of the
retention bonus award they receive if the proposed merger with Anheuser-Busch
("A-B Merger") is not completed or if the employment of any such individual is
terminated for cause or without good reason prior to the completion of the A-B
Merger. Payment of the retention bonus to Mr. Smith is contingent upon his
remaining employed with the Company until 90 days after the completion of the
A-B Merger, subject (with specified exceptions) to continued employment through
In addition to payment of the Thomas, Mennen and Perich retention bonuses prior
to year end, the Company may accelerate the vesting of Company equity awards and
the payment of 2019 annual bonuses in order to reduce negative tax consequences
for the Company and its executive officers in connection with the A-B Merger.
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