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EXHIBIT
10.28
Severance
Agreement
BY HAND
Mr. Gilbert Klemann
Dear Gil:
We are pleased that you are
joining Sotheby’s as Executive Vice President, Worldwide
General Counsel and Secretary, on the terms set forth in our offer
letter dated October 9, 2007 (the “Offer Letter”). This
letter sets forth our understanding and agreement (the
“Agreement”) with respect to your rights and
obligations in the event of the termination of your employment with
Sotheby’s (together with all of its subsidiaries and related
entities, “Sotheby’s” or the
“Company”). This Agreement is being provided to you
because you are a key employee at the Company and perform highly
specialized and unique duties for the Company. Consequently,
Sotheby’s is offering you the following terms and financial
enhancements and those set forth in the Offer Letter to ensure your
continued loyalty to the Company, and so that you will focus fully
and exclusively on your job duties at Sotheby’s. Defined
terms used herein are used with the meanings given to them in
Exhibit A.
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(1)
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Severance
Arrangements.
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(a)
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If at any time
from the date of commencement of employment through December 31,
2009 (the “Applicable Period”), your employment by the
Company is terminated by you for Good Reason or by the Company
without Cause, the Company shall pay or provide you with the
following:
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(i)
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The sum of
your base salary through the date of termination to the extent not
theretofore paid, any declared and earned but unpaid bonus amount
for the prior calendar year and reimbursement for any unreimbursed
expenses incurred through the date of termination (“Accrued
Obligations”); and
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(ii)
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$1,000,000, which amount
shall be in lieu of any other payment to which you might otherwise
be entitled under the Company’s Severance Plan.
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(b)
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If during the
Applicable Period your employment by the Company is terminated by
the Company for Cause, this Agreement shall terminate without
further obligation to you, except that the Company shall pay or
provide you with the sum of your base salary through the date of
termination to the extent not theretofore paid. You will not be
eligible for any bonus for any period prior to or after the date of
termination of your employment.
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(c)
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Any payments payable pursuant
to this Paragraph 1 beyond Accrued Obligations shall only be
payable if you deliver to the Company a release, as similarly
required under the Sotheby’s, Inc. Severance Plan, of any and
all your claims (except with regard to claims for payments or
benefits specifically payable or providable hereunder which are not
yet paid as of the effective date of the release, claims for vested
accrued benefits, claims under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), or
claims relating to any rights of indemnification under the
Company’s certificate of incorporation or by-laws or claims
under any directors and officers liability insurance policy)
occurring up to the release date with regard to the Company and its
respective past or present officers, directors and employees in
such form as may be reasonably requested by the Company.
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(2)
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Certain Agreements . In
consideration of the undertakings by the Company in Paragraph (1)
and in the Offer Letter, you agree to be bound by the covenants and
agreements set forth in Exhibit B.
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(3)
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Miscellaneous . You may not
assign your rights or delegate your obligations under this
Agreement. Sotheby’s shall be entitled to withhold from any
payments or deemed payments under this Agreement any amount of
withholding required by law. This Agreement constitutes the entire
agreement between you and Sotheby’s concerning the subject
matter of your employment, with the exception of letters and
documents specifically referenced herein. Any waiver or amendment
of any provision of this Agreement must be done in writing and
signed by both parties.
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(4)
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Legal and Equitable Remedies .
Sotheby’s shall be entitled to enjoin a violation by you of
any provision hereof. Moreover, the parties hereto acknowledge that
the damages suffered by Sotheby’s as a result of any
violation of this Agreement may be difficult to ascertain.
Accordingly, the parties agree that in the event of a breach of
this Agreement by you, Sotheby’s shall be entitled to
specific enforcement by injunctive relief of your obligations to
Sotheby’s. The remedies referred to above shall not be deemed
to be exclusive of any other remedies available to Sotheby’s,
including to enforce the performance or observation of the
covenants and agreements contained in this Agreement.
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(5)
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Arbitration . Any dispute,
controversy or claim arising out of or relating to this agreement,
or breach thereof (other than an action or proceeding for an
injunction or other equitable relief pursuant to Paragraph 4
hereof), shall be settled by arbitration in New York City in
accordance with the National Rules for the Resolution of Employment
Di
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