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XXXXXX X. XXXXXXX & SONS, INC.
EXECUTIVE OFFICES
000 XXXX XXXXXX, XXX XXXX, XXX XXXX 00000
March 14, 2000
PERSONAL AND CONFIDENTIAL
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Xx. Xxxx X. Xxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xxxx:
This letter (the "Agreement") sets forth the terms of the agreement
between you and us with respect to your continued employment as Executive Vice
President - Human Resources of The Seagram Company Ltd. ("SCL") and of Xxxxxx X.
Xxxxxxx & Sons, Inc. ("Seagram" and, together with SCL, the "Company").
1. Term of Employment.
a. Employment Term. The Company agrees to employ you, and you
agree to serve the Company, for the three and one-half year
period commencing on January 1, 2000 and ending on June 30,
2003 (the "Employment Term"), on the terms and subject to the
conditions set forth in this Agreement.
b. Prior Agreements. This Agreement supercedes all prior
agreements and understandings (including verbal agreements)
between you and the Company and/or its affiliates regarding
the terms and conditions of your employment with the Company
and/or its affiliates, including, without limitation, the
letter between you and Seagram dated April 27, 1995.
2. Duties. You shall serve as Executive Vice President - Human
Resources of the Company. In such position, you shall be the most senior
officer of the Company with respect to human resources, and you shall report
directly to the Chief Executive Officer of SCL.
3. Annual Base Salary. The Company shall pay you a base salary at
the annual rates set forth below (the "Annual Base Salary"). Your salary shall
be payable in regular installments
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in accordance with the Company's usual payroll practices for senior executives.
The annual rates shall be:
a. $550,000 for the period beginning January 1, 2000 and ending
December 31, 2000;
b. $575,000 for the period beginning January 1, 2001 and ending
December 31, 2001;
c. $600,000 for the period beginning January 1, 2002 and ending
December 31, 2002; and
d. $625,000 for the period beginning January 1, 2003 and ending
June 30, 2003 (i.e., $312,500 for that period).
4. Annual Target Bonus. With respect to each fiscal year of the Company
that ends on or prior to June 30, 2003, you also are eligible to earn an annual
management incentive award determined by the Human Resources Committee of the
Board of Directors of SCL (the "SCL Board") in its sole discretion. Your annual
target bonus will be 90% of the rate of Annual Base Salary to which you are
entitled at the end of the relevant period (the "Annual Target Bonus").
5. Equity-Based Awards.
a. You have received, as approved by the Human Resources
Committee of the SCL Board, a one-time grant of 225,000
options pursuant to the 1996 Stock Incentive Plan at an
exercise price equal to the fair market value of an SCL
common share on the date of grant. One-third of these
options will vest and become exercisable upon the first
anniversary of the date of grant, another third of these
options will vest and become exercisable upon the second
anniversary of the date of grant, and the remaining third of
these options will vest and become exercisable upon the
third anniversary of the date of grant.
b. You will also be considered for an annual grant under the
1996 Stock Incentive Plan (or its successor) in 2003, at the
sole discretion of the Human Resources Committee of the SCL
Board.
6. Pension. You shall participate in Seagram's pension, retirement and
similar plans applicable to senior executives generally. After termination of
your employment, but not prior to age 60, (or, if you elect, at age 55 but
subject to a 3% per year reduction from age 60), the total annual pension
payable to you for life shall not be less than the product of $30,000 times the
number of years (or portion thereof) of your continuous service with the
Company, up to the maximum benefit
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that would be payable to you under the terms of the Benefit Equalization Plan or
replacement plans at age 60. Following your death, your surviving spouse (as
defined in the Seagram Retirement Account Plan or replacement plan), if any,
shall be paid an annual pension for life that is equal to two-thirds of the
annual pension you were receiving immediately prior to your death.
7. Retiree Medical Coverage. If you remain employed throughout
the Employment Term, after you have reached age 55 you will be eligible for
retiree medical coverage in accordance with the Company's then-existing retiree
medical program.
8. Other Benefits. You also will be eligible to participate in our
Senior Executive Compensation and Benefits Program of which the management
incentive award and stock options referenced above are a part. Except as
otherwise provided in this Agreement, the terms of the plans in that Program
shall govern any awards that you may be eligible to earn. The Program also
includes medical benefits; accident, life insurance and disability salary
continuation; flexible perquisites; matching contributions and related benefits.
9. Termination of Employment. This Section 9 shall exclusively
govern your right to compensation and benefits in the event your employment with
the Company terminates prior to the expiration of the Employment Term. Your
employment hereunder may be terminated by either party at any time and for any
reason, provided that you shall be required to give the Company at least 30
days' advance written notice of any resignation of employment.
a. By the Company for Cause or By Your Resignation. If your
employment is terminated by the Company for Cause or by your
resignation, you shall be entitled to receive (1) the Annual
Base Salary earned through the date of termination, and (2)
any annual bonus earned but unpaid for any fiscal year ending
prior to the date of termination. You shall be paid the
above amounts in the form of a single, lump sum cash payment
as soon as administratively practicable following the date of
termination. You also shall be entitled to receive such
other Company benefits or awards to which you are entitled
under the terms of the relevant plan, policy or arrangement,
other than any severance plan, policy or arrangement.
b. By the Company Without Cause. In the event your employment is
terminated by the Company without Cause, you shall be
entitled to receive (1) your then remaining unpaid Annual
Base Salary pursuant to Subsections 3.a. through 3.d. of this
Agreement through June 30, 2003, (2) any annual bonus earned
but unpaid for any fiscal year ending prior to the date of
termination, and (3) your Annual Target Bonus for each fiscal
year (commencing with the fiscal year in which your
termination occurs) through June 30, 2003, as calculated
pursuant
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to Section 4. You shall be paid the above amounts in the form
of a single, lump sum cash payment within 15 business days
following the date of termination. In addition, (1) all
options to purchase SCL shares then held by you shall become
immediately exercisable, but will, in all other respects,
remain subject to the terms and conditions of the applicable
stock option plan, (2) you shall be entitled to continuation
of medical, dental, life and disability coverages in effect
from time to time for senior executive officers of SCL and
its successors through June 30, 2003 or, if earlier, the date
you become employed by a subsequent employer, and (3) you
shall be entitled to receive such other Company benefits or
awards to which you are entitled under the terms of the
relevant plan, policy or arrangement, other than any
severance plan, policy or arrangement. Finally, upon your
attainment of age 55 you shall be eligible for retiree
medical coverage pursuant to Section 7.
c. Due to Disability or Death. In the event your employment is
terminated due to your disability or death, you or your
estate, as applicable, shall be entitled to receive (1) the
Annual Base Salary earned through the date of termination,
(2) any annual bonus earned but unpaid for any fiscal year
ending prior to the date of termination, and (3) a pro-rated
Annual Target Bonus for the fiscal year of termination. The
above amounts shall be paid in the form of a single, lump sum
cash payment as soon as administratively practicable
following the date of termination. In addition, your
properly designated beneficiary shall be entitled to receive
such other Company benefits or awards to which such
beneficiary is entitled as of the date of termination under
the terms of the relevant plan, policy or arrangement, other
than any severance plan, policy or arrangement. To the
extent not payable pursuant to the foregoing sentence, your
surviving spouse (as defined in Section 6 of this Agreement)
shall be entitled to receive the two-thirds pension benefit
described in Section 6 of this Agreement. For purposes of
this subsection, "disability" shall have the same meaning as
provided under the SCL Senior Executive Compensation and
Benefits Program.
d. Definition of Cause. For purposes of this Agreement, "Cause"
shall mean (1) your gross misconduct or a willful breach of a
substantial and material obligation under this Agreement; (2)
your intentional and material failure to comply with the
Policies and Procedures for Worldwide Business Conduct of SCL
and Affiliates, and the Company's discrimination and sexual
harassment policies, as in effect from time to time; or (3)
your conviction of a felony or crime of moral turpitude.
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e. Lump Sum. Any lump sum payments required to be made to you
pursuant to Section 9 of this Agreement will be discounted to
present value from the time at which such amounts would have
been paid absent any accelerated payment at an annual
discount rate for the relevant periods equal to the "mid-term
applicable Federal rate" (within the meaning of Section
1274(d) of the Internal Revenue Code of 1986, as amended),
compounded annually, in effect on the date of termination.
10. Miscellaneous Provisions.
a. Confidentiality. You will not at any time (whether during or
after the period of your employment with the Company)
disclose or use for your own benefit or purposes or the
benefit or purposes of any person, entity or association
other than the Company or its affiliates, any trade secret,
information, data or other confidential information relating
to the business and affairs of the Company or any of its
affiliates, generally, or information that is not unique to
the Company or its affiliates, or information that is
generally known in the industry or the public other than as a
result of your breach of this provision. You agree that upon
the termination of your employment with the Company for any
reason, you will return to the Company immediately all
memoranda, books, papers, plans, information, letters and
other data, all copies thereof or therefrom, in any way
relating to the business of the Company and its affiliates,
except that you may retain personal notes, notebooks and
diaries that do not contain confidential information of the
type described above. You further agree that you will not
retain or use for your own account at any time any trade
names, trademark or other proprietary business designation
used or owned in connection with the business of the Company
or its affiliates.
b. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
c. Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the
employment of you by the Company. There are no restrictions,
agreements, promises, warranties, covenants or undertakings
between the parties with respect to such employment, other
than those expressly set forth herein. This Agreement may not
be altered, modified or amended except by written instrument
signed by the parties hereto.
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d. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall
not be considered a waiver of such party's rights or deprive
such party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
e. Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid,
illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of
this Agreement shall not be affected thereby.
f. No Mitigation. If the Company terminates your employment for
any reason, or if you resign, you will have no duty to
attempt to mitigate your damages by seeking alternative
employment, the Company will not be entitled to reduce the
amount of any compensation or benefits payable to you under
this Agreement by any amounts received by you in connection
with such alternative employment, and you will not be
required to pay the Company any amounts that you may receive
from any such alternative employment or otherwise. The
Company's obligations to you under this Agreement shall not
be subject to any offset or defense.
g. Successors; Binding Agreement. This Agreement shall insure
to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
h. Notice. For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other
address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change
of address shall be effective only upon receipt.
If to the Company:
Xxxxxx X. Xxxxxxx & Sons, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
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If to you, at the address indicated herein.
i. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such federal,
state and local taxes as may be required to be
withheld pursuant to any applicable law or
regulation.
j. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Sincerely,
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Accepted and agreed to as of the date indicated above, this the 15 day of
March , 2000.
/s/ Xxxx Xxxxxx
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Xxxx X. Xxxxxx
