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Exhibit 10(b)
September 30, 1998
PERSONAL AND CONFIDENTIAL
Xx. Xxxxxx X. Xxxxxxxx
00 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx:
This letter confirms our understanding regarding certain aspects of
your continued employment as President and Chief Executive Officer - The Seagram
Spirits And Wine Group and as Executive Vice President of The Seagram Company
Ltd. and of Xxxxxx X. Xxxxxxx & Sons, Inc., (the "Company" or "Seagram"),
subject to the terms and conditions set forth herein. This letter supersedes and
replaces the prior letter between you and the Company, dated November 4, 1997.
1. Pension
In connection with Seagram's pension, retirement and similar plans
applicable to senior executives generally in which you currently participate,
the Company agrees to treat separation from employment for purposes of pension
benefits in the following manner:
(a) In the event your employment is terminated (i) by the Company
at any time without cause, or (ii) by you voluntarily with the
Company's consent your pension benefit will be calculated
pursuant to the provisions of the Benefit Equalization Plan
("BEP") or any replacement plan, including, but not limited to
the Additional Service Credit provision. Further, your total
annual compensation for purposes of calculating your
retirement benefit
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under BEP will be determined in accordance with paragraph 1(b)
hereof.
(b) In the event that your employment is terminated under the
conditions described in paragraph 1(a) the Company shall use
the following formula for determining your annual compensation
for fiscal year 1997, and each subsequent year in which you
remain employed, for purposes of determining your average
final compensation necessary to calculate your pension benefit
pursuant to the BEP and the Executive Supplement Plan (the
"ESP"), or any replacement plans. To determine such total
annual compensation, the Company agrees to use the higher of
(a) your base salary plus your actual annual management
incentive award under the Management Incentive Plan ("Bonus"),
or any replacement plan or (b) your base salary plus your
target Bonus, whichever is greater. As we have also agreed,
your target Bonus for Fiscal Year 1999, and all future fiscal
years, is equal to ninety (90) percent of your annual base
salary. The Company further agrees that, for purposes of
determining your average final compensation under the BEP and
ESP, it will count your last year's salary and bonus twice in
making such a determination.
(c) Notwithstanding the provisions of paragraph 1(b) above, in the
event your employment is terminated by the Company with cause
at any time, or you leave without the Company's consent prior
to December 27, 2002, your pension benefit will be calculated
solely pursuant to the terms of the Pension Plan for Employees
of Xxxxxx X. Xxxxxxx & Sons, Inc. ("Qualified Plan") and the
ESP, or any replacement plans; provided, however, that the
determination of your total annual compensation for purposes
of calculating your retirement benefit pursuant to the ESP
will be in accordance with the provisions of paragraph 1(b)
hereof;
(d) In the event of your death at any time while you are actively
employed the Company will pay benefits under the Qualified
Plan and BEP as if you had retired on the date of your death
and were qualified for a BEP benefit pursuant to paragraph
1(a) hereof or otherwise and calculated in accordance with the
provisions of paragraph 1(b) hereof with respect to your BEP
benefit. Accordingly, your spouse, Xxxxx Xxxxxxxx, will
receive the two-thirds surviving spouse benefit provided by
the Senior Executive Group Term Life Insurance Policy or any
replacement program
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("Group Term Life") which will be payable in accordance with
Seagram's normal practices.
(e) In the event your employment is terminated under any other
circumstances or at any other time, your pension and surviving
spouse benefits will be calculated in accordance with the
terms of the Qualified Plan, ESP, BEP, Group Term Life, or
replacement plans, as are applicable to you based upon then
actual service and age, provided, however, that the
determination of total annual compensation necessary to
calculate your retirement benefit under BEP or ESP will be
made in accordance with paragraph 1(b) hereof.
2. Separation Benefits
(a) In the event your employment is terminated by the Company
without cause or by you with the Company's consent, the
Company will provide (i) your annual base salary, (ii) your
target Bonus, and (iii) continued participation in the
medical, dental and life insurance aspects of our Senior
Executive Benefits Program for three (3) years after the date
of termination.
(b) In the event your employment is terminated for any other
reason, severance or separation benefits, if any, will be
payable in accordance with the terms of any applicable plans.
3. Confidentiality
You represent and agree, as appropriate, that you (i) have not
disclosed and shall not disclose the terms of this Agreement to anyone,
provided, however, that this shall not preclude disclosure to your counsel,
financial advisor and immediate family, (ii) have instructed your counsel,
financial advisor and immediate family to whom you have disclosed or may
disclose the terms of this Agreement not to disclose such information to anyone,
and (iii) have abided by and will continue to abide by The Seagram Company
Ltd.'s policies and procedures for worldwide business conduct.
4. General Provisions
Except as required by any applicable law, no benefit provided herein
shall in any manner be anticipated, assigned or alienated, and any attempt to do
so shall be void. This Agreement shall not confer on you any right to be
retained in the employ of the Company and the right of the Company to terminate
your employment at will, for no reason (whether by dismissal, discharge or
otherwise) at any time is specifically
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reserved. This Agreement shall be construed, interpreted and governed in
accordance with the laws of the State of New York without reference to rules
relating to conflicts of law.
If this letter accurately reflects our Agreement, please sign and
return it to me. An executed original is enclosed for your records.
Very truly yours,
/s/ X. Xxxxxx
READ, ACCEPTED AND AGREED
/s/ X.X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
10/1/98
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Date
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