Severance Agreement - Adolph Coors Co. and Alvin C. Babb
December 1, 1993 Mr. Alvin C. Babb Executive Vice President Coors Brewing Company BC 400 Golden, CO 80401 RE: Agreement Regarding Severance or Termination Dear Al: This letter sets forth the terms and conditions that will apply in the event that your employment with Coors Brewing Company is terminated between now and December 31, 1996. Either you or Coors may terminate your employment at any time prior to December 31, 1996, with thirty (30) days' prior written notice. While employed, you will receive salary and other benefits in accordance with company practice. Attached to this letter is a list of the benefits you will receive at the termination of this agreement. You will receive the medical plan benefits provided by the Company at the time of your termination. In addition, Coors will provide you, on an after-tax basis, with any additional benefits necessary to assure that you receive in the aggregate the same benefits you would have been entitled to receive, on an after-tax basis, if you had retired under the medical program in effect in October 1993. If your employment is terminated on or before December 31, 1996, within thirty (30) business days after such termination, the Company will pay you an amount equal to the sum of two times your annual salary at the date of termination (but not less than two times your current salary of $268,800) plus a lump-sum payment under your salary continuation agreement calculated at your annual base salary at the date of termination (but not less than your current salary) and using a five percent (5%) annual discount rate. This figure includes the payment you are entitled to receive under salary continuation or supplemental pension or severance arrangements. Should you die before termination of this agreement, the Company's financial obligation to you may be fulfilled in whole or in part through payment of your existing Company-paid officers' life insurance policy (six times salary), but in no event will you be entitled to receive a total of more than the greater of the amount payable under such officer's life insurance and the amount payable under the preceding paragraph. Al, you may not assign your rights or obligations under this agreement. Any dispute arising under this agreement will be settled in Denver, Colorado, in accordance with the rules of the American Arbitration Association then in effect. The parties shall be entitled to discovery as permitted by the Colorado Rules of Civil Procedure. Your signature below indicates that you agree to the employment terms set forth in this letter. COORS BREWING COMPANY By: /s/ W. Leo Kiely, III /s/ Alvin C. Babb Alvin C. Babb Date: 12/15/93 <PAGE> ATTACHMENT TO LETTER TO ALVIN C. BABB DECEMBER 1, 1993 As an Officer of Coors Brewing Company, if you are eligible for and elect regular retirement after electing to terminate your employment under the Enhanced Voluntary Severance Program, you are eligible for the following benefits at the time of your retirement: GROUP HEALTH: Medical - In-Network - You and your eligible dependents are provided with 100% medical coverage of approved charges if you participate in the HHA process, 85% without HHA. All eligible dependent children have 100% coverage of approved charges. If you use an out-of-network provider, there is a $250 per individual deductible and coverage will be reduced to 65% or 70% depending on HHA participation. Dental - Coors provides you and your eligible dependent with 100% coverage of approved expenses. Prescription Drugs - Coors will pay 100% of prescription drugs for you and your eligible dependents. The current premium for Group Health coverage is $50.00 per month for eligible dependent coverage. Officer Life Insurance - Coverage will cease upon date of retirement; you may purchase all or any part of the policy at the cash value less any policy loan. Annual Physical - A complete physical examination is provided annually for you through the Coors Medical Center. This benefit will continue when you retire. Adoption Assistance - This benefit will cease upon date of retirement. Equity Incentive Plan - You may exercise your Options under this Plan until the earliest of either the day your Option Period expires, or three months following the date of your retirement. NQSO - You may exercise your options until the earliest of either the day your Option Period expires or two months following the date of your retirement. Deferred Compensation - Coors will pay you an amount based upon 30% of your last annual salary including officer's salary. One year will be added to your age and to your service when calculating your benefits and you will receive a vested benefit payable in a lump sum. Vesting will be 1% of final annual pay for each full year with the Company. This benefit is reduced for early retirement form either age 65 or Rule of 85 date. You will receive the greater of your deferred compensation benefit per your agreement or the Enhanced Deferred Compensation amount (as stated above). Officers' Salary - Your Officers' salary ceases when you retire but is use in the calculation of your retirement benefit and deferred compensation. Car - You have the option of purchasing your company car at the Company's book value. Country Club Membership - You may assume the membership for your use during retirement upon payment of the monthly dues and any assessment fees. Financial Planning - You may continue this service for two years following your date of retirement. The cost of this service is assumed by Coors. Sports Tickets - Unused tickets to sporting events must be returned to the Company at date of retirement.