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Exhibit 10.1
XXXXXX X. XXXXXXX & SONS, INC.
EXECUTIVE OFFICES
000 XXXX XXXXXX, XXX XXXX, XXX XXXX 00000
November 1, 1999
Xxxxxx X. Xxxxxxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear Xxx:
This letter amends and restates our original letter agreement with
you dated July 31, 1995, as amended and restated on February 4, 1998, under
which you currently serve as Vice Chairman and Chief Financial Officer of The
Seagram Company Ltd. ("SCL") and of Xxxxxx X. Xxxxxxx & Sons, Inc. (the
"Company"), in light of the mutual intention of you, SCL and the Company for
your employment to terminate no later than March 31, 2001.
1. Position and Duties.
(a) During the period commencing on the date of this letter and ending
December 31, 1999, you will continue to be employed as Vice Chairman and Chief
Financial Officer of SCL and the Company, and will continue to perform your
current duties on a full-time basis.
(b) During the period from January 1, 2000 through May 31, 2000 (the
"Transition Period"), subject to the Company's right to terminate the Transition
Period, as set forth below, you will continue to be employed to perform services
on a full-time basis as Vice Chairman of SCL and the Company, with
responsibility for Investor Relations, Corporate Communications, Corporate
Shared Services, Corporate Real Estate, Corporate Strategic Sourcing and
Information Technology. The Company may, upon 30 days notice or pay (including a
pro-rated portion of the bonus described in paragraph 3) in lieu of notice,
elect to terminate the Transition Period prior to May 31, 2000, in which event
the Advisory Period described in (c) below shall commence.
(c) During the period from June 1, 2000 (or such earlier date as may
apply by application of (b) above) through March 31,
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2001 (the "Advisory Period"), you will remain an employee of the Company, and
will make yourself available to render support and advisory services to the
Company and SCL at the request of the Chief Executive Officer of SCL. At the end
of the Advisory Period your employment by SCL, the Company and their affiliates
shall terminate, and such termination will entitle you to the payments and
benefits described in paragraph 6(c) below.
(d) From the date hereof through the end of the Transition Period,
while you are employed hereunder, we will make our best efforts to insure your
election to, and retention as a member of, the Board of Directors of SCL and the
Board of Directors of the Company, your principal office will be located at the
Company's headquarters in New York City, and except for reasonable travel
requirements associated with your position, you will be performing your services
hereunder in the New York City metropolitan area. At the end of the Transition
Period, you shall resign all officerships and directorships of SCL and its
affiliates, and you will no longer have an office at the Company. If at any time
you obtain substantially full time employment (or substantially full-time
self-employment, other than managing your personal or family's investments), you
shall immediately notify the Company, and resign all officerships and
directorships of SCL and its affiliates, and the Company shall provide
appropriate notice (not to exceed 60 days after receipt of notice from you) to
you of the termination of your employment, whereupon your employment by SCL and
the Company and its affiliates shall cease. Upon such cessation of employment,
you will become entitled to the payments and benefits described in paragraph
6(c) below. If your new substantially full-time employment or self-employment
commences during the period following your notification to the Company as
described in the preceding sentence and preceding your termination of employment
with the Company and SCL, you will continue to make yourself available to render
support and advisory services to the Company and SCL as described in paragraph
1(c) above, provided that such support and services do not materially interfere
with such new full-time employment.
2. Base Salary. Your base salary through the end of the
Transition Period and for one month thereafter will be payable at a rate of
$1,000,000 per year. Starting on the first day of the Advisory Period you shall
receive a salary at a rate of $20,000 per month. Your salary will be paid in
equal periodic installments in accordance with the Company's payroll policies
applicable to its senior executives.
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3. Bonus Plans. Your annual bonus for the fiscal year ending
June 30, 2000 shall be $2,341,500, payable when other senior executives of the
Company receive their annual bonuses, but no later than September 28, 2000. No
annual bonus shall be payable in respect of the Advisory Period. If the Advisory
Period begins prior to June 1, 2000, the annual bonus payable hereunder shall be
reduced by multiplying it by a fraction, the numerator of which is the number of
days from July 1, 1999 through the end of the Transition Period, and the
denominator of which is 365 and such annual bonus shall be paid no later than
ten (10) days following the end of the Transition Period.
4. Options. While you are employed hereunder, all options that
you currently hold to purchase common shares, without nominal or par value, of
SCL (the "Options") shall continue to become exercisable in accordance with
their terms, provided that any Options which have not otherwise become vested
and exercisable shall become fully vested and exercisable on March 31, 2001.
There will be no further option grants to you hereafter. After termination of
employment your rights with respect to the Options will be determined under the
terms of the Options, except as provided in paragraph 6(c).
5. Benefit Plans and Arrangements. (a) While you are employed
hereunder, you will be entitled to participate, in a manner appropriate to your
position with the Company, from time to time, in all benefit and compensation
plans, programs and arrangements generally applicable to the Company's senior
executives (other than any annual bonus plan and any option plan except to the
extent described herein). In addition, your senior executive medical, dental and
life insurance aspects of our Senior Executive Benefit Program will continue
through the earlier of June 30, 2002 or the date you become eligible for
medical, dental and life insurance coverage with a subsequent employer.
(b) While you are employed hereunder, the Company will provide
to you, through the end of the Transition Period, at the Company's expense a car
and driver and such other fringe benefits and perquisites (including vacation
entitlement) as are generally available to the Company's senior executives.
After the end of the Transition Period, no fringe benefits or perquisites will
be provided; you shall receive your Company car and your current home computer
(plus peripherals) upon termination of your employment (other than for Cause).
You will be afforded the same indemnity provisions regarding directors and
officers liability
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that the Company and SCL provide to their senior executive officers and
directors. In addition, you will be covered by any directors and officers
liability policy generally in force for SCL's and the Company's senior executive
officers and directors.
(c) Commencing on the first day of the month following your
attainment of age 60, you will receive a pension benefit of the product of
$50,000 times the number of full and partial years that you were employed by SCL
or the Company, payable each year for your lifetime; provided that such product
will be reduced by all other pension payments you may receive under the SCL or
Company defined benefit plans or arrangements, expressed as a single-life
annuity.
(d) You have previously deferred all or a portion of your
annual bonuses. We hereby agree with you that such prior deferrals, plus any
amount of the bonus under paragraph 3 that you defer pursuant to the Company's
normal deferral policies, along with any earnings thereon in accordance with the
Company's deferral arrangements, shall become payable to you in eight annual
installments, starting on July 1, 2005, equal to one-eighth, one-seventh,
one-sixth, one-fifth, one-fourth, one-third, one-half and all of your remaining
deferred compensation balance, respectively, and that pending such distribution
your deferred compensation account shall be periodically credited with earnings
as a Prime Rate Deferred Award under the Company's applicable policies. In the
event of your death, an accelerated lump sum payment of such deferred
compensation account shall be made as soon as practicable after your date of
death.
6. Termination. (a) The Company may terminate your employment
hereunder for Cause or pursuant to paragraph 1(d). You may terminate your
employment for any reason, and your employment shall automatically terminate in
the event your death.
(b) In the event your employment with the Company is terminated
by the Company for Cause, you will receive, as soon as practicable thereafter, a
lump sum payment equal to the sum of (i) all Base Salary accrued but unpaid
through your date of termination and (ii) the unpaid portion, if any, of any
annual bonus or any other compensation otherwise payable hereunder with respect
to any completed fiscal year of the Company preceding your date of termination.
(c) In the event your employment with the Company is terminated
by you at any time, your employment terminates
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pursuant to paragraph 1(c) or paragraph 1(d), or if you die, you (or your
estate, if applicable) will receive, subject to your (or your estate's, if
applicable) execution of a release in the form attached hereto as Exhibit A:
(i) a lump sum payment equal to the sum of all amounts
specified in paragraph 6(b) payable as soon as practicable
after termination;
(ii) a lump sum payment equal to any unpaid amount of
annual bonus under Section 3, multiplied, if the Advisory
Period has not yet commenced, by the number of days you
were employed during the fiscal year ending June 30, 2000,
and divided by 365, payable within 30 days after your
termination of employment;
(iii) a lump sum payment of $6,683,000; payable within 30
days after your termination of employment;
(iv) continued coverage under the medical, dental and
life insurance aspects of our Senior Executive Benefit
Program until the earlier of (A) June 30, 2002 or (B) the
date on which you become eligible for medical, dental and
life insurance coverage with a subsequent employer; and
(v) full vesting of the Options held by you on your date
of termination.
(d) For purposes of this Agreement:
"Cause" will mean (i) your conviction of a felony; (ii) any willful
misconduct by you which is materially injurious to SCL, the Company or
their affiliates or (iii) your willful and continuing refusal or failure
to perform your duties and obligations under this Agreement which is not
corrected within 30 days following written notice from the Company or SCL
to you specifying such refusal or failure. In no event shall your
incompetence in the performance of your duties hereunder or a bona fide
disagreement over corporate policy be deemed grounds for termination for
Cause. In the case of (i) and (ii) above, Cause shall include a
conviction or misconduct which occurs prior to your employment hereunder.
In the event of termination for willful misconduct
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described in (ii) above, you will receive five days advance notice of
termination of employment.
7. No Mitigation. You will not be required to mitigate any
payments due to you under this Agreement by seeking alternative employment, nor
will any payments from SCL or the Company be reduced by any amounts received in
connection with such alternative employment.
8. Legal Fees. The Company will reimburse you for (i) all
reasonable legal fees and disbursements incurred by you in connection with the
negotiation and preparation of this Agreement and (ii) all reasonable fees and
disbursements incurred by you in connection with any dispute over the
enforcement of your rights under this Agreement, but only if you prevail in such
dispute.
9. Confidentiality. You will not, without the prior consent
of the Company, or as required by a court of law or a governmental agency, or
administrative or legislative body with apparent jurisdiction to so order,
divulge confidential information concerning the operations of the Company or SCL
during your employment hereunder or at any time thereafter.
10. Withholding. The Company and SCL will be entitled to
withhold from any payment hereunder the amount of withholding required by law.
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11. Governing Law. This Agreement will 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.
12. Counterparts. This Agreement may be signed in counterparts.
The Seagram Company Ltd. and
Xxxxxx X. Xxxxxxx & Sons, Inc.
By:/s/ Xxxxx Xxxxxxxx, Xx.
Xxxxx Xxxxxxxx, Xx.
President and Chief Executive
Officer
Accepted and Agreed on this
1st day of November, 1999
/s/ X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
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EXHIBIT A
RELEASE
Xxxxxx X. Xxxxxxxxxxx (the "Executive") hereby covenants and
agrees not to xxx, file any action, complaint, charge, grievance or arbitration
or commence any other proceedings, administrative or judicial, against The
Seagram Company Ltd. ("SCL") or any of SCL's divisions, affiliates,
subsidiaries, parents, branches, predecessors, successors, assigns, officers,
directors, trustees, employees, agents, stockholders, administrators,
representatives, attorneys, insurers or fiduciaries, past, present or future
(collectively, the "SCL Group") in any court of law or equity, or before any
administrative agency, with respect to any matter whatsoever arising or
derivative from Executive's employment with, performing services for, or
consulting for, the SCL Group, or his separation from employment and termination
of services with the SCL Group, arising on or prior to the date of execution of
this Release, including, without limitation, claims arising under Title VII of
the Civil Rights Act of 1964, as amended, the Reconstruction Era Civil Rights
Act, as amended, the Age Discrimination in Employment Act, as amended, the Older
Workers Benefit Protection Act, as amended, the Fair Labor Standards Act, as
amended, the Employee Retirement Income Security Act of 1974, as amended, the
Worker Adjustment and Retraining Act, as amended, the Americans with
Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, the Connecticut Human Rights Law, as amended, the New York Human Rights
Law, as amended, the New York City Administrative Code, as amended, any state or
local laws regarding employment discrimination and/or federal, state or local
laws of any type or description regarding the employment of labor, and any and
all claims under state contract or tort law (the "Acts"); provided, however,
that this covenant not to xxx does not affect Executive's future right to
enforce appropriately the terms of this Release or the attached letter agreement
dated November 1, 1999 (the "Letter Agreement").
For and in consideration of payments described in the Letter
Agreement and for other good and valuable consideration, Executive hereby
releases and forever discharges, and by this
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instrument does release and forever discharge, SCL and the SCL Group of and from
any and all debts, obligations, promises, covenants, agreements, contracts,
endorsements, bonds, controversies, suits or causes of action known or unknown,
suspected or unsuspected, of every kind and nature whatsoever in respect of
those matters arising or derivative from Executive's employment with or
consulting for or otherwise performing services for, the SCL Group or
Executive's separation from employment and termination of services with the SCL
Group, which may heretofore have existed or which may now exist, including,
without limitation, those arising under the Acts; provided, however, that this
covenant does not affect Executive's future right to enforce the terms of the
Letter Agreement.
Executive understands and agrees that the obligations set forth
in the Letter Agreement are in lieu of any and all other amounts to which
Executive might be, is now, or may become entitled to receive from SCL or any
member of the SCL Group upon any claim in respect of those matters arising or
derivative from Executive's employment or other services with the SCL Group or
Executive's separation from the SCL Group and, without limiting the generality
of the foregoing, Executive expressly waives any claim to employment or
reinstatement to employment, payment for salary, wages, backpay, frontpay,
interest, bonuses, contributions to or vesting in any employee benefit plans,
damages, accrued vacation, accrued sick leave, medical, dental, optical or
hospitalization benefits, accidental death and dismemberment coverage, life
insurance benefits, overtime, severance pay and/or attorneys' fees or costs,
except as are expressly provided for in the Letter Agreement or under the terms
of any employee benefit plan or any member of the SCL Group in which Executive
participates as of the date hereof.
Executive understands and agrees that he must forever continue to
keep confidential all proprietary or confidential information which he learned
while employed by the SCL Group, whether oral or written ("Confidential
Information") and shall not make use of any such Confidential Information on his
own behalf or on behalf or any other person or entity; provided however, that
Executive may divulge such Confidential Information if he is required to do so
by a court of law, by any governmental agency having supervisory authority over
the business of the SCL Group, or by any administrative or legislative body with
apparent jurisdiction to order Executive to divulge, disclose or make accessible
such Confidential Information.
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Executive understands and agrees that SCL's payment of money to
him and his signing of this Release does not in any way indicate that he has any
viable claims against SCL or the SCL Group or that SCL or the SCL Group admits
any liability to him whatsoever.
Executive has read this Release carefully, has been given at least
twenty-one (21) days to consider all of its terms, has been advised to consult
with an attorney and other advisors of his choice, and fully understands that by
signing below he is giving up any right which he may have to xxx or bring any
other claims against SCL and the SCL Group. Executive has not been forced or
pressured in any manner whatsoever to sign his Release, and he agrees to all of
its terms voluntarily.
Executive understands that he has seven (7) days from the date he
has signed this Release below to revoke this Release, that this Release will not
become effective until the 8th day following the date that he has signed this
Release, and that SCL and the SCL Group will have no obligation to extend the
payments set forth in the Letter Agreement unless this Release becomes
effective.
This Release shall be governed by the laws of the United States of
America and the State of New York, without giving effect to the principles of
choice of law thereof.
Dated: __________ ___, ____
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Xxxxxx X. Xxxxxxxxxxx
THE SEAGRAM COMPANY LTD.
By:
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