Employment Agreement Letter dated November 4, 2019 between the Company and Jennifer Locke

Your employment with the Company is at-will and either you or the Company may terminate your employment at any time and for any reason, with or without Cause (as defined in attached Exhibit A), in each case subject to the terms and provisions of this Agreement. The initial term of your employment under this Agreement shall commence on the Effective Date and, unless terminated early in accordance with this Agreement, shall continue until the two (2) year anniversary of the Effective Date (the “Initial Term”). The Initial term will automatically extend on the same terms and conditions set forth below, unless terminated early in accordance with this Agreement, for additional one (1) year periods (each a “Renewal Term”), unless either party gives the other party written notice of non-renewal at least 60 days prior to the end of the Initial Term or any Renewal Term. The Initial Term, together with all Renewal Terms, are collectively referred to in this Agreement as the “Term.”

Your primary place of employment will be the Company’s corporate offices at 2700 Napa Valley Corporate Drive, Suite B, Napa, California, 94558.

Chief Executive Officer, reporting directly to the Board.

In your capacity as Chief Executive Officer, you will have supervision, control over, and responsibility for the day-to-day business and affairs of the Company and shall have such other duties, authorities and responsibilities commensurate for such or a similar position at a similarly situated company and as may from time to time be assigned by the Board, provided that such duties are consistent with your position as Chief Executive Officer.

$350,000 per year (the “Base Salary”) to be paid according to the Company’s normal payroll cycle, which currently pays base salary in regular installments every two (2) weeks. Your Base Salary will be reviewed at least annually by the Compensation Committee of the Board (“Compensation Committee”) and may be adjusted by the Compensation Committee in its discretion.

Beginning on January 1, 2020, you will be eligible to participate in the annual cash bonus program established by the Compensation Committee. Your target annual cash bonus amount (“Target Annual Incentive”) will equal 35% of your Base Salary. The actual amount of the annual bonus paid to you, if any, will be determined by the Compensation Committee, in its sole discretion, and may be more or less than the Target Annual Incentive and will depend on, among other things, the attainment of the performance goals established by the Compensation Committee, provided, that, for the period beginning January 1, 2020 and ending December 31, 2020, your Target Annual Incentive will be an amount no less than $81,666.67.

In consideration for you entering into this Agreement, during the first open trading window following the Effective Date, the Company will award you a nonqualified stock option under the Company’s 2013 Omnibus Incentive Plan (as may be amended from time to time, the “Stock Incentive Plan”) to purchase 89,000 shares of common stock of the Company (the “Option Award”), with such Option Award carrying an exercise price per share equal to the fair market value of the stock, as of the date of grant, determined in accordance with the Stock Incentive Plan and Section 409A of the Code. The Option Award will be memorialized pursuant and subject to the Company’s approved form of Nonqualified Stock Option Award Agreement. The Option Award shall vest in equal annual installments over five (5) years with the option to purchase 17,800 shares of common stock vesting on each one-year anniversary of the date of grant and a full acceleration of vesting in the event of: (i) a Change of Control (as defined in the Stock Incentive Plan); (ii) the termination of your employment by the Company without Cause (as defined in attached Exhibit A), (iii) the termination of your employment by you for Good Reason (as defined in attached Exhibit A); (iv) your death, or (v) your Disability (as defined in attached Exhibit A). The Nonqualified Stock Option Award Agreement will also include such other terms and conditions as may be approved by the Compensation Committee including, without limitation, that the Option Award will be subject to all of the terms and conditions of the Stock Incentive Plan, the Company’s insider trading policy, and the Company’s then existing clawback or recoupment policy, if any; however, in the event such terms conflict with this Agreement, this Agreement shall control.  You may be entitled to receive additional awards commensurate to your position, pursuant to the Stock Incentive Plan in the future, as determined by the Compensation Committee, in a manner consistent with the Company’s Articles of Incorporation.

The Compensation Committee intends to work with management and its outside compensation consultants to establish a long-term incentive plan (“LTIP”) for its executive management team and certain other employees of the Company identified by the Compensation Committee. The actual size, mix (e.g., cash, restricted stock, or other form of equity), and vesting schedule (e.g., vesting based on continued service and/or financial metrics such as stable free cash flow and working capital efficiency, inventory management, wine quality, and sustainability) applicable to such awards will be determined by the Compensation Committee, in its sole discretion (“LTIP Awards”).

During the Term, you will be eligible to participate in the Company’s standard company benefits on the same terms such benefits are offered to all other employees of the Company, and as may be amended, modified, or terminated by the Company from time to time, with or without notice, in accordance with the applicable benefit plan documents. For the avoidance of doubt, your participation in such benefit plans will be subject to the terms and conditions set forth in the applicable benefit plan documents.

During the Term, you will be entitled to an annual automobile allowance of $12,000, which shall be paid in substantially equal periodic installments, in accordance with the Company’s normal payroll cycle.

During the Term, you will be eligible for four (4) weeks of paid vacation subject to the Company’s vacation policy, including any accrual caps. Any vacation will be taken at the reasonable and mutual convenience of you and the Company. In addition, you will be entitled to sick leave and personal leave in accordance with the Company’s standard policies and procedures as may be amended, modified, or terminated by the Company from time to time, with or without notice, in accordance with the applicable policy and procedure documents.

As an executive officer of the Company, you will be entitled indemnification by the Company in accordance with Article XIII of the Company’s Amended and Restated Bylaws and as provided by applicable law, including but not limited to indemnification under California Labor Code section 2802.

In the event your employment is terminated: (i) by the Company for Cause; (ii) by you without Good Reason;; (iii) due to your death; or (iv) due to your Disability, the Company will pay you (or your spouse or estate as applicable) your accrued but unpaid Base Salary and accrued vacation pay (collectively, the “Accrued Obligations”), through your termination date, with such amount paid in compliance in accordance with applicable law.

In the event of your death or Disability, then, in addition to the Accrued Obligations, and subject to you or your spouse’s or estate’s timely execution (and non-revocation) of the release described below, you or your spouse or estate will be entitled receive the Base Severance Amount. The Base Severance Amount will be paid in installments over a 12 month period, in accordance with the Company’s normal payroll cycle, with the first installment paid during the first payroll period following the expiration of the release revocation period described below.

In order to receive the Base Severance Amount you or your spouse or estate must, no later than 60 days following your last day of employment or Disability, execute (and not revoke) a general release and waiver of any claims that you may have in connection with your employment and termination of employment with the Company and its affiliates. Notwithstanding anything in this Agreement to the contrary, if the Company concludes that the Base Severance Amount is subject to Section 409A of the Internal Revenue Code, and if the consideration period described in the release, plus the revocation period described in the release spans two (2) calendar years, the Severance Amount shall not begin to be paid until the second calendar year (and such first installment shall include installment payments that would otherwise have been made prior to such date).

You recognize that the Company’s employees are valuable and proprietary resources of the Company. Accordingly, you agree that, while you are in the employ of the Company, you shall not, without the express written permission from the Company, either on your own behalf or on behalf of any third party, directly or indirectly, solicit or attempt to solicit any employee of the Company to terminate his or her employment with the Company.

While you are providing services to the Company, the Company may disclose or make available to you information about its business affairs, products, services, confidential intellectual property, trade secrets, third-party confidential information and other sensitive or proprietary information, whether orally or in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential” (collectively, “Confidential Information”). Confidential Information shall not include information that, at the time of disclosure and as established by documentary evidence: (i) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Agreement by you; (ii) is or becomes available to you on a non-confidential basis from a third-party source, provided that such third-party is not and was not prohibited from disclosing such Confidential Information; (iii) was known by or in the possession of you prior to being disclosed by or on behalf of the Company; or (iv) was or is independently developed by you without reference to or use, in whole or in part, of any of the Confidential Information. You shall: (1) protect and safeguard the confidentiality of the Confidential Information with at least the same degree of care as you would protect your own confidential information, but in no event with less than a commercially reasonable degree of care; and (2) not use or disclose the Confidential Information, or permit it to be accessed, used or disclosed, for any purpose other than to carry out the duties assigned to you by the Company or as may be required to be disclosed pursuant to applicable federal, state or local law, regulation or a valid order issued by a court or governmental agency of competent jurisdiction. Upon your termination of service for any reason, or upon the Company’s written request, you shall promptly return to the Company all copies, whether in written, electronic or other form or media, of the Confidential Information, or destroy all such copies at the Company’s written request and certify in writing to the Company that such Confidential Information has been destroyed. In addition to all other remedies available at law, the Company may seek equitable relief (including injunctive relief) against you to prevent the breach or threatened breach of this confidentiality covenant and to secure its enforcement. Notwithstanding anything in this Agreement to the contrary, pursuant to the Defend Trade Secrets Act of 2016, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s trade secrets to your attorney and use the trade secret in the court proceeding, if you file any document containing the trade secret under seal and do not disclose the trade secret, except pursuant to court order.

Following the termination of your service with the Company for any reason, you agree to cooperate fully with the Company and with the Company’s counsel in connection with any present and future actual or threatened litigation, administrative proceeding or other investigation involving the Company or any affiliate that relates to events, occurrences or conduct occurring (or claimed to have occurred) during your employment. You are hereby instructed to tell the truth in any litigation, administrative proceeding, or other investigation involving the Company and nothing herein shall be deemed or construed to suggest otherwise. To the extent necessary and consistent with the Company’s D&O insurance coverage, the Company will secure appropriate legal counsel for you or, in the alternative, reimburse you for reasonable attorney’s fees and costs. In addition, you may be entitled to hourly compensation, at a rate not to exceed your final Base Salary, for the cooperation required by this paragraph.

During the Term, you agree that you will not criticize, defame, be derogatory toward or otherwise disparage the Company, its products, services, or the Company’s past, present and future officers, directors, managers, stockholders, agents, representatives, employees, or affiliates, or its or their business plans or actions, to any third-party, either orally or in writing, provided, that, that this provision will not: preclude you from giving testimony in response to a lawful subpoena; preclude any conduct protected under any state or federal law, including those providing “whistleblower” protection to you or the right to engage in concerted activities; or otherwise prevent you from disclosing information about unlawful acts in the workplace, including but not limited sexual harassment. On the date of your termination of service for any reason, you agree to update your profile on social media websites (such as LinkedIn) to reflect that you are no longer an employee of the Company.

To the extent required by law, the Company shall withhold from any payments due to you under this Agreement any applicable federal, state or local taxes. You hereby acknowledge that neither the Company nor any of its affiliates, shareholders, members, directors, managers, officers, employees, agents or representatives have provided you with any tax-related advice with respect to the matters covered by this Agreement and that you are solely responsible for obtaining your own tax advice with respect to the matters covered by this Agreement.

This Agreement shall comply with Section 409A of the Internal Revenue Code or an exception thereto and each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Neither the time nor schedule of any payment under this Agreement may be accelerated or subject to further deferral except as permitted by Section 409A of the Internal Revenue Code and the applicable regulations. You do not have any right to make any election regarding the time or form of any payment due under this Agreement. Notwithstanding anything in this Agreement to the contrary, if the Company concludes, that the Base Severance Amount is subject to Section 409A of the Internal Revenue Code, then no such Severance Amount will be paid prior to your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (applying the default rules of Treasury Regulation Section 1.409A-1(h)). Installment payments made pursuant to this Agreement shall be treated as separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).

In the event that any payments, distributions, benefits or entitlements of any type payable to you, whether or not payable upon a termination of employment (“Payments”): (i) constitute “parachute payments” within the meaning of Section 280G of the Code; and (ii) but for this Section would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Payments shall be reduced to such lesser amount (the “Reduced Amount”) that would result in no portion of the Payments being subject to the Excise Tax; provided, however, that such Payments shall not be so reduced if a nationally recognized accounting firm or compensation consulting firm selected by the Company (the “Accountants”) determines that without such reduction Executive would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code, federal, state and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal rates which applied (or is likely to apply) to you for the tax year in which the Payments are to be made, or such other rate(s) as the Accountants determine to be likely to apply to you in the relevant tax year(s) in which any of the Payments are expected to be made), an amount that is greater than the amount, on a net after-tax basis, that you would be entitled to retain upon receipt of the Reduced Amount.  Unless otherwise agree in writing, any determination made under this Section shall be made in good faith by the Accountants in a timely manner and shall be binding on the parties absent manifest error. In the event of a reduction of Payments pursuant to this Section, the Payments shall be reduced in the order determined by the Accountants that results in the greatest economic benefit to you in a manner that would not result in subjecting you to additional tax under Section 409A of the Internal Revenue Code. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority.  The Accounts shall provide detailed supporting calculations to both you and the Company and the Company shall bear the cost of all fees charged by the Accountants in connection with any calculations contemplated by this Section. If the provisions of Sections 280G and 4999 of the Internal Revenue Code are repealed without succession or if the Company determines that such provisions do not apply to it and/or you for whatever reason, this Section shall be of no further force or effect.