PYRAMID BREWERIES INC
EXHIBIT 10.1
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<DESCRIPTION>EXHIBIT 10.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.1
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Pyramid Breweries Logo&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">September&nbsp;20, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Michael R. O&#146;Brien<BR>
3204 East Mercer Street<BR>
Seattle, Washington 98112

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Michael:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter confirms the basic terms and conditions of our offer of employment 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The title of your position is VP Finance and Chief Financial Officer reporting to the CEO (me).
Stated broadly, you are responsible for all finance and administration matters of the company.
Areas include, but are not limited to Finance, Planning &#038; Development (M&#038;A), Risk Management,
Accounting/Reporting, Information Systems, Investor Relations, Legal, Legislative &#038; Regulatory
Affairs, Administration &#038; Corporate Secretary. In addition, you are responsible for internal
controls, treasury and financial planning and analysis, defining key Company financial objectives,
policies and procedures, supporting their achievement and measuring/reporting their results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Compensation and Benefits</B><BR>
Your compensation and benefits package at Pyramid Breweries Inc. will include the following:
</DIV>


<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Your base salary will be $6,153.85 per pay period ($160,000 per annum), payable bi-weekly in
arrears, by direct bank transfer.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You will be eligible to participate in the Company&#146;s Officer Incentive Compensation Bonus
Plan (OICP), which is explained further in this letter.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You will be eligible to receive restricted stock awards based on both performance and
service, which is explained further in this letter.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Your first annual performance review is scheduled for early 2007 consistent with the
company&#146;s annual performance review process and timeline. Interim performance reviews are
scheduled at your manager&#146;s discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Your monthly car allowance will be $575.00.</TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Group medical coverage through Regence Blue Shield. Vision and dental coverage via the
company&#146;s 60% reimbursement program. All coverage begins the first calendar day of the first
month after 90&nbsp;days of employment.
&nbsp;</TD>
</TR>
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</TD>
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<TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate
and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You will earn 160 hours of vacation your first year of service which can be used as earned.
Subsequent vacation will be earned according to this vacation accrual schedule. You will earn
40 hours of sick leave each year of service (up to a maximum of 160 hours). Pyramid Breweries
Inc. also observes eight paid holidays each year.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Eligibility for participation in the Pyramid Breweries Inc. 401(k) Plan on October&nbsp;1, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Eligibility for participation in the Employee Stock purchase Plan on January&nbsp;1, 2007.
</DIV>

<DIV style="margin-top: 6pt">
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    <TD width="1%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This offer is subject to your ability to begin work no later than September&nbsp;25, 2006.
Employment is also subject to you passing our pre-employment drug test as well as a reference
check.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please be sure to bring a valid Washington driver&#146;s license and a social security card (or other
appropriate proof of your identity and authorization to work in the United States) on your first
day of employment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In performing your job duties, you will be exposed to a great deal of confidential information
regarding our company, our products and employees and our customers. It is essential that all such
information, which is not generally, know to the public, be kept confidential and not be disclosed
to any third parties without our express authorization. I cannot emphasize this point enough.
Confidentiality is a primary concern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I am excited about our future together as part of the team here at Pyramid Breweries and am looking
forward to working with you.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ Scott Barnum
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Scott Barnum<BR>
Chief Executive Officer

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>
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    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Performance Based Incentive Program (OICP)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The company has a performance based incentive program for company officers. The program&#146;s
main purpose is to drive improvement in the company&#146;s overall business performance as measured by
certain total company financial metrics (i.e., the Corporate Target) and divisional financial
targets (i.e., Division Targets) as determined by the Compensation Committee or Board each year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Below you will find your 2006 incentive program elements. For your position as Vice President of
Finance and CFO, your total potential incentive is 40% of your base pay. Your incentive is as
follows:
</DIV>


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    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>40% of annual base salary if the company meets the Corporate Target(s)</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Annual payments under the Officer Incentive Compensation Plan will occur after the publication of
the year-end earnings release and approval by the Pyramid Board of Directors or Compensation
Committee. Any payment to which you may become entitled under the 2006 Officer Incentive
Compensation Plan will be prorated based on employment start date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;
</DIV>

<DIV align="center">
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</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Performance Incentive Plan (PIP)</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The PIP pays to officers and selected management positions an additional bonus in the form of an
incentive pool for over- achieving its Corporate Target. The PIP incentive pool will be calculated
based on &#147;stretch&#148; performance goals set and approved by the Compensation Committee or Board in
conjunction with Management. For fiscal 2006, the Officer Pool is 10% of any excess above the
approved Total Company stretch target, your share of the officer pool is 15%. Any payment to
which you may become entitled under the 2006 PIP will be pro rated based on employment start date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a company we have set aggressive yet attainable goals for this year. This program is designed
to reward you for your part in achieving these goals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;
</DIV>

<DIV align="center">
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    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Restricted Stock Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to the approval of the Compensation Committee, you will be granted restricted stock
awards under the Company&#146;s 2004 Equity Incentive Plan (the &#147;Plan&#148;) on the following terms (subject
to the terms and conditions of the Plan and Restricted Stock Award Notices and Restricted Stock
Agreements evidencing the awards (each, an &#147;Award Agreement&#148;)):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Award</U>. You will be granted a stock award for
20,000 shares on January&nbsp;1, 2007. As more particularly set forth in the
applicable Award Agreement, (A)&nbsp;these shares will be subject to forfeiture in
the event your employment with the Company terminates under certain
circumstances, (B)&nbsp;such forfeiture restrictions will lapse (i.e., the shares
will vest) in 20% installments (each, an &#147;Annual Installment&#148;) beginning on
January&nbsp;1, 2008 and on the next four anniversaries of that date; and (C)&nbsp;after
December&nbsp;31, 2007, if your employment is terminated by the Company without
Cause or by you for Good Reason, or as a result of your death or Disability
(all as defined below) then the forfeiture restrictions 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;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Annual Performance Awards</U>. You will be entitled to
receive the following equity compensation awards (each, a &#147;Performance Award&#148;)
based on the Company&#146;s achievement of certain performance goals as follows:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(A)&nbsp;upon the filing of the Company&#146;s Annual Report on Form 10-K
(&#147;10-K&#148;) for the year ended December&nbsp;31, 2007 (or, if the Company is no
longer subject to the reporting requirements under Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934, as amended, upon the completion of the
audit of the Company&#146;s financial statements for 2007), 4,000 shares if the
Company achieves an increase in return on average net equity for the year
ending December&nbsp;31, 2007, of at least 200 basis points as compared to return
on average net equity for the year ending December&nbsp;31, 2006;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(B)&nbsp;upon the filing of the Company&#146;s 10-K for the year ended December&nbsp;31,
2008 (or, if the Company is no longer subject to the reporting requirements
under Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, as
amended, upon the completion of the audit of the Company&#146;s financial
statements for 2008), 4,000 shares if the Company achieves an increase in
return on average net equity for the year ending December&nbsp;31, 2008, of at
least 200 basis points as compared to return on average net equity for the
year ending December&nbsp;31, 2007;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(C)&nbsp;upon the filing of the Company&#146;s 10-K for the year ended December&nbsp;31,
2009 (or, if the Company is no longer subject to the reporting requirements
under Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, as
amended, upon the completion of the audit of the Company&#146;s financial
statements for 2009), 4,000 shares if the Company achieves an increase in
return on average net equity for the year ending December&nbsp;31, 2009, of at
least 200 basis points as compared to return on average net equity for the
year ending December&nbsp;31, 2008;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;
</DIV>
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    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
</TR>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(D)&nbsp;upon the filing of the Company&#146;s 10-K for the year ended December&nbsp;31,
2010 (or, if the Company is no longer subject to the reporting requirements
under Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, as
amended, upon the completion of the audit of the Company&#146;s financial
statements for 2010), 4,000 shares if the Company achieves an increase in
return on average net equity for the year ending December&nbsp;31, 2010, of at
least 200 basis points as compared to return on average net equity for the
year ending December&nbsp;31, 2009; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(E)&nbsp;upon the filing of the Company&#146;s 10-K for the year ended December&nbsp;31,
2011 (or, if the Company is no longer subject to the reporting requirements
under Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, as
amended, upon the completion of the audit of the Company&#146;s financial
statements for 2011), 4,000 shares if the Company achieves an increase in
return on average net equity for the year ending December&nbsp;31, 2011, of at
least 200 basis points as compared to return on average net equity for the
year ending December&nbsp;31, 2010.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to each Performance Award, the date on which the 10-K is filed (or, if the
Company is no longer subject to the reporting requirements under Section&nbsp;13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the date on which the audit of the financial
statements for the related period is completed shall be referred to herein as the
&#147;Performance Award Date&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Performance Award will be in the form of a stock award, provided that you can elect
instead to receive a Performance Award in the form of stock units by delivering to the
Company written notice to that effect no later than the 10th business day prior to the
Performance Award Date for that award. Each Performance Award will be evidenced by an Award
Agreement and will be subject to the terms and conditions set forth in such Award Agreement,
the Plan and this agreement. For purposes of this agreement, the &#147;Vesting Commencement
Date&#148; for the Performance Awards contemplated in II(A) &#151; (E)&nbsp;above shall be January&nbsp;1,
2008, January&nbsp;1, 2009, January&nbsp;1, 2010, January&nbsp;1, 2011 and January&nbsp;1, 2012, respectively.
As more particularly set forth in the Award Agreement relating to each Performance Award or
the Plan, (A)&nbsp;each Performance Award will be subject to a forfeiture restriction that will
lapse on the first anniversary of its Vesting Commencement Date, (B)&nbsp;the forfeiture
restrictions will lapse on an accelerated basis under certain circumstances in the event of
a Company Transaction or Change in Control (both as defined in the Plan), and (C)&nbsp;the
forfeiture restrictions will lapse on a pro rata basis (based on the date your employment
terminates) in the event of a termination of your employment by the Company without Cause
(as defined below), by you for Good Reason (as defined below) or as a result of your death
or Disability. In addition, notwithstanding any contrary provisions of the Plan or any
successor incentive plan, no Performance Award that has vested under this agreement shall be
subject to forfeiture thereafter. If, during the period between the Vesting Commencement
Date applicable to a Performance Award and the Performance Award Date applicable to such
Performance Award, your employment is terminated by the Company without Cause or by you for
Good Reason or your employment terminates as a result of your death or Disability, you will
be entitled to receive a pro rata portion (based on the date your employment terminates) of
such Performance Award as of the applicable Performance Award Date notwithstanding that your
are no longer employed by the Company, and such pro rata portion of such Performance Award
will not be subject to any forfeiture restrictions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;
</DIV>

<DIV align="center">
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</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">6</TD>
</TR>
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</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Termination Provision:</B><BR>
In the event your employment may be terminated, your compensation and benefits shall terminate
except as otherwise provided below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Without Cause or Good Reason:</U><BR>
Either you or the company may terminate your employment at any time by giving fourteen (14)
calendar days&#146; 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)&nbsp;calendar days&#146; 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)&nbsp;calendar days&#146;
notice).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>By Company for Cause:</U><BR>
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 &#147;cause&#148; 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Death:</U><BR>
Your employment shall terminate automatically upon your death.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Permanent Disability:</U><BR>
The Company may terminate your employment immediately if you become permanently disabled. For
purposes of this agreement you will be considered &#147;permanently disabled&#148; if, for a continuous
period of twenty-four (24)&nbsp;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&#146;s judgment, doing so
is required by law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Termination Payments:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Termination Without Cause:</U><BR>
If the Company terminates your employment at any time after January&nbsp;1, 2008 when neither cause nor
permanent disability exists, (i)&nbsp;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&#146;s salary plus any incentive compensation bonuses for which you are
eligible under the terms of the applicable plan at that time; and(ii) tor a six-month period after
the date of termination, the Company shall continue to provide at the Company&#146;s cost, the Company&#146;s
medical benefits to you and qualifying family members. Such liquidated damages shall be paid only
if you execute a full and final general release of all claims against Company (including Company&#146;s
officers, directors, agents, employees and assigns) arising out of your employment relationship
with Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Termination payments shall be paid out at your normal payroll rate on regular payroll days subject
to normal payroll
deductions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%"></TD>
    <TD width="3%"></TD>
    <TD width="31%"></TD>
    <TD width="3%"></TD>
    <TD width="31%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>All Other Terminations</U>:<BR>
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I am excited about our future together as part of the team here at Pyramid Breweries.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,
</DIV>

<DIV align="left">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="25%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">/s/ Scott Barnum
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">9/25/06</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">Scott Barnum
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date</DIV></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Chief Executive Officer</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">Pyramid Breweries
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">/s/ Michael O&#146;Brien
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">9/25/06</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">Michael O&#146;Brien
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%"></TD>
    <TD width="3%"></TD>
    <TD width="31%"></TD>
    <TD width="3%"></TD>
    <TD width="31%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">The Pyramid Breweries&#146; 2006 Corporate and Operations Incentive Compensation Program is governed by the program document.</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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