EXHIBIT 10.3
AGREEMENT
AGREEMENT by and among Xxxxxx Xxxxx Company, a Colorado corporation
("ACC"), Coors Brewing Company, a Colorado corporation ("CBC") (ACC and CBC are
hereinafter individually and collectively referred to as the "Company"), and
______ (the "Executive"), dated as of June 1, 2002.
The Executive is employed by the Company. The Board of Directors of the
Company (the "Board") has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
dedication of the Executive, in the event of the threat or occurrence of a
Change of Control (as defined below) of the Company. The Board believes that it
is important to diminish the distraction of the Executive from Company business
because of personal uncertainties and risks created by a pending or threatened
Change of Control and to encourage the Executive's full attention and dedication
to the Company currently and in the event of any threatened or pending Change of
Control.
The parties agree as follows:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date on which a Change
of Control (as defined in Section 2) occurs during the Term (as defined in
Section 1(b)).
(b) The "Term" shall mean the period commencing on the date hereof
and ending on the second anniversary of the date hereof; provided, however, that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), unless previously terminated,
the Term shall be automatically extended so as to terminate two years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Board shall
give notice to the Executive that the Term not be so extended. Notwithstanding
notice to the Executive that the Term shall not be extended, if a Change of
Control occurs prior to the expiration of the Term, then the Term shall be
automatically extended so as to expire two years from the date of such Change of
Control.
2. Change of Control. For the purposes of this Agreement, a "Change of
Control" shall occur if:
(a) a Person or Persons become(s) the direct or indirect Beneficial
Owner of more than 20% of the total voting power of the Voting Stock of the
Company at a time when the Existing Shareholder does not hold more than 50% of
the voting
power of the Voting Stock of the Company, provided that any such
acquisition of beneficial ownership of Voting Stock by any of the following
Persons shall not by itself constitute a Change of Control hereunder: (i) the
Company or one of its wholly-owned subsidiaries or (ii) any employee benefit
plan (or related trust) sponsored or maintained by the Company or one of its
wholly-owned subsidiaries;
(b) the Company consummates a merger, reorganization,
recapitalization, joint venture, consolidation, share exchange, business
combination or similar form of corporate transaction involving the Company
(each, a "Business Combination") unless, immediately following such Business
Combination, more than 50% of the voting power of the then outstanding Voting
Stock of the Person resulting from consummation of such Business Combination
(including, without limitation, any parent or ultimate parent corporation of
such Person that as a result of such transaction owns directly or indirectly the
Company and all or substantially all of the Company's assets) is held by the
Existing Shareholder.
(c) individuals who constitute the Board (the "Incumbent Directors")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to February 14, 2002, whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be deemed to
be an Incumbent Director; or
(d) the shareholders of the Company approve a dissolution or
liquidation involving all or substantially all of the Company's assets, or the
Company consummates the sale of all or substantially all of the Company's assets
to a Person, unless more than 50% of the voting power of the Voting Stock of
such Person is held directly or indirectly by the Existing Shareholder.
(e) For purposes of this Section 2, the following definitions shall
apply:
(i) "Beneficial Owner and Beneficially Own" shall mean
beneficial ownership as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to beneficially own
all securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time.
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(ii) "Company Common Stock" shall mean the Company's Class A
Common Stock and Class B Common Stock and any other common stock
(whether voting or non-voting) that may be hereafter issued by the
Company.
(iii) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(iv) "Existing Shareholder" shall mean the Xxxxxx Xxxxx, Xx.
Trust and any successor trust thereto the primary beneficiaries of
which are descendants of Xxxxxx Xxxxx, Xx.
(v) "Person" shall mean any individual, corporation, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act).
(vi) "Voting Stock" shall mean any and all shares, interests,
participations, rights in or other equivalents of capital stock and
warrants or options exchangeable for or convertible into such capital
stock which ordinarily have the power to vote for the election of
directors, managers or other voting members of the governing body (the
"Governing Board") of a Person.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second anniversary of
such date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), total
enterprise-wide scope (if Executive is an officer of ACC), authority,
duties and responsibilities shall be commensurate in all material
respects with the most significant of those held, exercised and assigned
at any time during the one year period immediately preceding the
Effective Date and (B) the Executive's services shall be performed at
the location where the Executive was employed preceding the Effective
Date or any office or location less than thirty-five miles from such
location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and to
discharge the responsibilities assigned to the Executive hereunder.
During the Employment Period Executive may
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(A) serve on civic or charitable boards or committees of not for profit
or similar organizations, (B) teach, and (C) manage personal
investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee
of the Company in accordance with this Agreement. To the extent that any
such activities have been conducted by the Executive and by other
executives of the Company prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall
be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has
been earned but deferred, to the Executive by the Company and its
affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed no more than
twelve months after the last salary increase awarded to the Executive
prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under
common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be entitled to participate, with respect to each fiscal
year ending during the Employment Period, in the Company's Management
Incentive Compensation Plan, or any comparable successor plans, under
terms (including measures of performance, targets and payout potential)
at least as favorable as the terms under such bonus plan as in effect
during the Company's fiscal year ending immediately prior to the
Effective Date (the "Annual Bonus"). Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next
following the end of the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such
Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the Company
and its affiliated companies,
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but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings
opportunities or retirement benefit opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided
by the Company and its affiliated companies for the Executive under such
plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally during the two year
Employment Period following the Effective Date to other peer executives
of the Company and its affiliated companies.
(iv) Stock Options and Other Equity Grants. During each year of
the Employment Period, the Executive shall receive either (A) stock
option grants pursuant to the Company's 1990 Equity Incentive Plan or
any successor plan for each fiscal year ending during the Employment
Period equal to the highest number and value to those granted to
Executive for any of the three (3) fiscal years prior to the Effective
Date (the "Stock Option / RSO Valuation"), or (B) if such Plan or Plans
do not exist, then an amount in cash equal to the Stock Option / RSO
Valuation Amount. In addition, during the Employment Period, the
Executive shall receive restricted stock grants pursuant to the
Company's 1990 Equity Incentive Plan or any successor plan for each
fiscal year during the Employment Period equal to the highest number and
value to those granted to Executive for any of the three (3) fiscal
years prior to the Effective Date (the "Stock Option / RSO Valuation"),
or (B) if such Plan or Plans do not exist, then an amount in cash equal
to the Stock Option / RSO Valuation Amount.
(v) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) to
the extent applicable generally to other peer executives of the Company
and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer executives
of the Company and its affiliated companies.
(vi) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
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incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated
companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(vii) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, or cash payments in lieu
of such fringe benefits, including but not limited to, tax and financial
planning services, payment of club dues, use of an automobile and
payment of related expenses, in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(viii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable
of the foregoing provided to the Executive by the Company and its
affiliated companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as
provided generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(ix) Vacation. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(x) Retirement Plan. On the Effective Date, the Company shall
credit Executive with additional years of vesting service and an equal
number of years of benefit service (but not for age) for Executive to
receive benefits under the Coors Retirement Plan and any other
supplemental or other retirement or pension plan maintained by the
Company applicable to Executive or any successor(s) to the Coors
Retirement Plan or such other plans (individually and collectively, the
"Retirement Plans").
5. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the thirty
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
a disability pursuant to the Company's then existing Long Term Disability Plan
or, in the absence of such a plan, a disability determined to be total and
permanent by a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is a violation of fiduciary duties or is
materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, or upon the instructions of the Chief Executive Officer of
the Company, or based upon the advice of counsel for the company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three quarters of the entire membership
of the Board at a meeting of the Board called and
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held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail. The Company must notify the
Executive of any event constituting Cause within ten (10) days following the
Company's knowledge of its existence or such event shall not constitute Cause
under this Agreement.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without Executive's express written consent, the occurrence of any of the
following events:
(i) a demotion or diminution in rank, title, responsibility or
authority, the assignment to the Executive, following the Effective
Date, of any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 4(a) of
this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company
within ten (10) days after receipt of such notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, including but not limited
to the failure by the Company to pay the Executive any portion of his
compensation, or to provide an Annual Bonus under terms (including but
not limited to measures, targets and payout potential) at least as
favorable as the terms for such Bonus as in effect during the Company's
fiscal year immediately prior to the Effective Date or to pay the
Executive any portion of an installment of deferred compensation under
any deferred compensation program of the Company when such compensation
is due, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company within
ten (10) days after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof
for more than 60 days during any twelve consecutive calendar months or
the Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
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(v) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason in the Executive's sole discretion during the thirty-day period
immediately following the first anniversary of the Effective Date shall be
deemed to be a termination for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date up to six months thereafter specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination or any later date specified
therein within 30 days of such notice and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:
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(i) the Company shall pay to the Executive in a lump sum in cash
within ten (10) days after the Date of Termination the aggregate of the
following amounts:
(A) the sum of (1) the Executive's Annual Base Salary (which for
this purpose shall include any allowance for perquisites that is paid
directly to the Executive) through the end of the fiscal year containing
the Date of Termination; (2) an amount equal to (x) the higher of the
target bonus amount or the bonus actually paid to the Executive under the
Company's Management Incentive Compensation Plan (or any comparable
successor plan(s)) for the fiscal year of the Company prior to the
Effective Date or (y) the target bonus amount payable to the Executive
under such plan(s) for the fiscal year of the Company which contains the
Date of Termination, whichever of (x) or (y) is higher (the "Target
Bonus"); and (3) any accrued vacation or other pay not theretofore paid
(the sum of the amounts described in clauses (1), (2), and (3) are herein
referred to as the "Accrued Obligations"); and
(B) the amount equal to the product of (1) two and (2) the sum of
(x) the Executive's Annual Base Salary (which for this purpose shall
include any allowance for perquisites that is paid directly to the
Executive) and (y) the higher of (aa) the Target Bonus and (bb) the
highest annual incentive bonus earned by Executive during the last three
(3) completed fiscal years of the Company immediately preceding
Executive's Date of Termination (annualized in the event Executive was not
employed by the Company for the whole of any such fiscal year), with the
product of (1) and (2) reduced by the amounts paid, if any, to the
Executive under the Company's Severance Pay Plan or pursuant to any other
contractual arrangement with the Executive or plan providing coverage to
the Executive as a result of such termination.
(ii) for twenty-four months after the Executive's Date of
Termination or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue
benefits to the Executive and/or the Executive's family, including life
insurance, at least equal (on an after-tax basis) to those which would have been
provided to them in accordance with the plans, programs, practices and policies
described in Section 4(b)(v) of this Agreement if the Executive's employment had
not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families, provided, however, that
if the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under
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such other plan during such applicable period of eligibility, but only to the
extent that the Company reimburses the Executive for any increased cost and
provides any additional benefits necessary to give Executive the benefits
provided hereunder.
(iii) The Company shall credit Executive for benefit calculation
purposes under the Retirement Plans (A) for the balance of the Employment Period
and (B) with two additional years of benefit service, vesting service and age.
(iv) for twenty-four months following the Date of Termination the
Company shall, at its sole expense, reimburse the Executive for the cost (but
not in excess of $25,000 in the aggregate), as incurred, for outplacement
services the scope and provider of which shall be selected by the Executive in
Executive's sole discretion.
(v) for twenty-four months following the Date of Termination the
Company shall, to the extent not otherwise paid or provided, pay or provide to
the Executive, all other fringe benefits and executive perquisites provided on
the date of this Agreement, or on the Date of Termination to the extent they are
more extensive, including, but not limited to, luncheon club dues, annual
physical examination, parking, health club dues, and financial planning
assistance ("Other Benefits"); and
(vi) with respect to any options, restricted stock or other stock
based awards held by the Executive pursuant to the Company's Equity Incentive
Plan, or any successor plan, on the Date of Termination all restrictions on
awards of restricted stock will be canceled, and all outstanding stock options
and stock appreciation rights and other stock based awards that have not fully
vested, shall vest immediately and become fully exercisable and shall not
thereafter be forfeitable; provided further that with respect to the Executive's
stock options, (i) the options shall remain exercisable until the earlier of (x)
the expiration of the option term or (y) five (5) years after the Date of
Termination; (ii) for purposes of option exercises by the Executive following
the Effective Date for the period such options remain exercisable for each share
of common stock acquired pursuant to such option exercise, Executive shall be
entitled to a cash payment equal to the excess, if any, of (x) the closing price
of one share of the common stock subject to such option as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, Inc. (the "NYSE")
(or, if the securities are not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
securities are listed or admitted to trading or, if the securities are not
listed or admitted to trading on any national securities
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exchange, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, any such exchange
or system an "Other Exchange") on the date of the Change of Control over (y) the
closing price of one share of the common stock on the NYSE or any Other Exchange
on the date of exercise; and (iii) if, after a Change of Control occurs, any of
the Executive's stock options are not assumed or substituted by the successor
corporation or the common stock (or common stock equivalent, in the case of a
non-U.S. entity) for which each such option is exercisable is not traded on the
NYSE or any Other Exchange, then in respect of each such option held by the
Executive, the Executive, in exchange for surrendering such options, shall be
entitled to an immediate cash payment equal to the Black-Scholes value
(determined as of that date, the date of grant, or the Effective Date, whichever
of the foregoing is highest) of each such option as determined by the
independent accounting firm that audited the Company's financial statements
prior to the Change of Control, assuming that the option's expected life is the
balance of its term.
(b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within thirty days of the Date of Termination. The term Other Benefits at
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the Company and
affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries. Anything in this
Agreement to the contrary notwithstanding, if the Executive's accidental death
occurs after the receipt of a Notice of Termination for any termination (i) by
the Company other than for Cause or Disability or (ii) by the Executive for Good
Reason and no payments to Executive have been made under Section 6(a), then this
Section 6(b) shall not apply and the Executive's estate and/or beneficiaries
shall be entitled to the benefits of Section 6(a).
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations
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shall be paid to the Executive in a lump sum in cash within thirty days of the
Date of Termination. The Term "Other Benefits" as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.
(d) Termination in Anticipation of a Change of Control.
(i) An "Anticipatory Termination" occurs if either
(A) (1) the Company terminates the Executive's employment
other than for Cause or Disability prior to the date on which a
Change of Control occurs, (2) it is reasonably demonstrated by the
Executive that such termination of employment (x) was at the request
of a third party who had taken steps reasonably calculated to effect
a Change of Control or (y) otherwise arose within six months of, and
was in connection with or in anticipation of, a Change of Control,
and (3) a Change of Control occurs, or
(B) (1) during the Term, an event occurs that would have
constituted Good Reason if the Effective Date was deemed to be the
date immediately prior to the date of such event and the Executive
terminated his employment subsequent to such event, (2) the
Executive can reasonably demonstrate that such Good Reason event (x)
was at the request of a third party who had taken steps reasonably
calculated to effect a Change of Control or (y) otherwise arose
within six months of, and was in connection with or in anticipation
of, a Change of Control, and (3) a Change of Control occurs.
For purposes of clauses (A)(2)(y) and (B)(2)(y) of this paragraph, it
shall be presumed that such event was in connection with or in
anticipation of a Change of Control unless the Company establishes
otherwise by clear and convincing evidence.
(ii) Obligations of the Company upon an Anticipatory
Termination. If the Executive has reason to believe that an
Anticipatory Termination may have occurred, he shall provide a notice
setting forth such belief in accordance with Section 13(b) of this
Agreement within one hundred and
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twenty (120) days after a Change of Control has occurred. Upon an
Anticipatory Termination, the Executive shall be entitled to (A) the
payments specified in Sections 6(a)(i), (iii) and (iv) (to the extent
not previously paid), (B) the benefits specified in Sections 6(a)(ii)
and (v) )to the extent not previously provided) (or the after-tax
equivalent thereof to the extent that such benefits have not been or
are not provided in kind), (C) to the extent that the Executive has
outstanding any unexercised stock options and other stock-based awards,
the provisions of Section 6(a)(vi) shall apply to them, and (D) in
respect of any stock options or other stock based awards that were
forfeited by the Executive as a result of his termination of employment
but would have vested had Section 6(a)(vi) applied, such awards shall
be reinstated (or if not reinstated, the Executive shall be paid in
cash the fair value of such award as determined by the accounting firm
referred to in Section 6(a)(vi)). For the purposes of this Section
6(e)(ii), the Executive's Date of Termination shall be deemed to be his
last date of employment by the Company.
7. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 13(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice, or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment,
except as specifically provided with respect to medical and other welfare
benefits under another employer-provided plan pursuant to subsection 6(a)(ii).
The Company agrees to pay as incurred, and to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
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9. Certain Additional Payments by the Company.
(a) Anything in this Agreement or in any other agreement between the
Company and the Executive or in any stock option or other benefit plan to the
contrary notwithstanding and except as set forth below, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by such
nationally recognized certified public accounting firm as may be designated by
the Executive (the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within fifteen business days
of the receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the Company or the
individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive within five
business days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that a Gross-Up Payment which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
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(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notifications shall be given as
soon as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the thirty-day
period following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest, and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or to contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for
16
the taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to consent such denial of refund prior to the expiration of thirty days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all material proprietary information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for denying, deferring or withholding any
amounts or benefits payable to the Executive under this Agreement.
11. Dispute Resolution .
(a) All claims and controversies that may arise under this Agreement
shall be submitted to, and determined through, binding arbitration in the
Denver, Colorado metropolitan area in accordance with the employment arbitration
procedures of the American Arbitration Association ("AAA") existing at the time
the arbitration is conducted, before a single arbitrator chosen in accordance
with AAA procedures. The decision of the arbitrator shall be enforceable as a
court judgment.
17
(b) The Company shall reimburse Executive for all legal fees and
expenses and related costs and expenses incurred by Executive arising from any
claim, controversy or dispute (i) that is submitted to arbitration, whether
initiated by the Executive or the Company, and including any dispute as to
whether Executive is entitled to fees, expenses and costs under this Section
11(b); (ii) in seeking to obtain or enforce any right or benefit provided for
under this Agreement; or (iii) in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within five
(5) business days after delivery of Executive's written request(s) for payment
accompanied by invoices of fees, expenses and costs incurred.
(c) If within fifteen (15) days after any Notice of Termination is
given or, if later, prior to the Date of Termination (as determined without
regard to this Section 11(c)), the person receiving such Notice of Termination
notifies the person giving such notice that a claim, controversy, or dispute
exists concerning the termination or concerning employment or any of the
provisions of this Agreement that apply to such termination or employment, the
Date of Termination shall be extended to the date on which the claim,
controversy or dispute is fully and finally resolved, either by mutual written
agreement of the parties or by final decision of the arbitrator referred to in
Section 11 (a).
(d) If a purported termination of Executive's employment occurs and
such termination or the provisions of this Agreement that apply to such
termination is disputed in accordance with this Section 11 (including a dispute
as to the existence of "good faith" and/or "reasonable attention and time" under
any provisions of this Agreement), the Company shall continue to pay Executive
the full compensation (including, but not limited to, salary) at Executive's
Annual Base Salary and continue Executive's participation in all compensation
plans required to be maintained hereunder and continue to provide Executive all
other benefits provided for in Section 4(b) of this Agreement until the dispute
is finally resolved in accordance with this Section 11. Amounts paid under this
section are in addition to all other amounts due under this Agreement and shall
not be offset against or reduce any other amounts due Executive under this
Agreement.
(e) In any proceeding (regardless of who initiates such proceeding)
under this Agreement the burden of proof as to whether Cause exists, whether
Good Reason does not exist, and/or whether "good faith" and/or "reasonable
attention and time" exist shall be upon the Company.
12. Successors.
(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than
18
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and any other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
At their current home address as listed in the Company's records
and as may be updated from time to time by the Executive.
If to the Company:
Coors Brewing Company
000 00xx Xx.
Xxxxxx, XX 00000-0000
Attention: Chief Legal Officer
19
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i) through (v) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will",
and the Executive's employment and/or this Agreement may be terminated by either
the Executive or the Company at any time prior to the Effective Date, in which
case the Executive shall have no further rights under this Agreement except as
provided in Section 6(e) (relating to termination in anticipation of a change in
control). From and after the Effective Date this Agreement shall supersede any
other agreement between the parties with respect to the subject matter hereof.
20
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name and on its behalf, all as
of the day and year first above written.
Executive:
---------------------------------
Xxxxxx Xxxxx Company / Coors
Brewing Company:
By:
------------------------------
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