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TENTH AMENDMENT
AGREEMENT made as of April 30, 1998, between GREY ADVERTISING
INC., a Delaware corporation with principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Grey"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, residing at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("▇▇▇▇▇").
▇▇▇▇▇ is employed by Grey as its President, Chairman of the
Board and Chief Executive Officer pursuant to an employment agreement originally
executed effective February 9, 1984 and amended from time to time thereafter
(such employment agreement, as so amended, being hereinafter referred to as the
"Current Agreement").
The parties desire to amend the Current Agreement in certain
respects.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereby agree as follows:
1. Capitalized Terms. Capitalized terms used herein, unless
otherwise defined herein, have the meaning ascribed to such terms in the Current
Agreement.
2. Section 6 of the Current Agreement is hereby amended and
restated to read as follows:
6. Disability If, during the term of this Agreement,
▇▇▇▇▇ should be unable regularly to perform his duties as required by
this Agreement because of Disability, Grey shall nevertheless pay or
credit to him, as the case may be in accordance with Grey's prior
policies, (i) during the first two years of such Disability (or, if
earlier, to the termination date of this Agreement), the Compensation
he would have been entitled to pursuant to Section 3 hereof, including
but not limited to his full Basic Salary, full bonus (based upon the
discretionary bonus awarded to ▇▇▇▇▇ for the calendar year immediately
preceding such Disability), full allocations (i.e., 15% of the total
SMIP pool) and payouts under the Senior Management Incentive Plan,
credits to the Pension
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Account and the Sub-Account in accordance with Section 4 hereof, and
continued health benefits and (ii) during the period (if any) of
Disability beginning on the second anniversary of such Disability and
ending on the termination date of this Agreement, his full Basic
Salary, full allocations (i.e., 15% of the total SMIP pool) and payouts
under the Senior Management Incentive Plan, credits to the Pension
Account and the Sub-Account in accordance with Section 4 hereof, and
continued health benefits, with such amounts being appropriately
reduced to reflect partial years. During the entire period of his
incapacity, ▇▇▇▇▇ shall perform such services for Grey as he is
reasonably able to perform based upon the nature and extent of his
Disability. As used in this Agreement, "Disability" shall mean ▇▇▇▇▇'▇
physical or mental incapacity so as to render him incapable of carrying
out his duties under this Agreement. To establish a status of
Disability as provided in the preceding sentence, there must first be
issued in writing a determination of Disability. A determination of
Disability may be issued at the initiation of Grey, ▇▇▇▇▇ or a legal
representative of ▇▇▇▇▇. A determination of Disability shall be issued
upon the written certification of a qualified medical doctor agreed to
by Grey and ▇▇▇▇▇ or, in the event of ▇▇▇▇▇'▇ incapacity to designate a
doctor, ▇▇▇▇▇'▇ legal representative. In the absence of agreement
between Grey and ▇▇▇▇▇ (or his legal representative), each party shall
nominate a qualified medical doctor and the two doctors shall select a
third doctor, who shall make the determination as to the Disability. In
the event that either ▇▇▇▇▇ or Grey shall desire to establish whether
▇▇▇▇▇ is Disabled, ▇▇▇▇▇ (or his legal representative) and Grey shall
use their respective best efforts to cooperate so that a prompt
determination can be reached and ▇▇▇▇▇ shall make himself available, as
reasonably requested by Grey, for examination by a doctor in accordance
with this paragraph.
Notwithstanding the foregoing, (a) if ▇▇▇▇▇
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should be able regularly to perform significant, important or otherwise
valuable services in connection with management, operations,
administration or client relations of Grey substantially equivalent to
half-time employment, then he may elect to continue as Chairman of the
Board of Grey and (b) even if ▇▇▇▇▇ shall not be able to regularly
resume any such duties referred to in the first paragraph of this
Section 6 or assume the duties referred to in this paragraph, he shall
be entitled to receive office facilities, assistance and other
arrangements as provided in Section 13 hereof.
3. Section 4 of the Current Agreement is hereby amended and
restated to read as follows:
4. Supplemental Pension. (a) ▇▇▇▇▇ shall, upon
termination of his employment with Grey, be entitled to receive a
supplemental pension, determined in accordance with the succeeding
provisions of this Section 4. As of the date hereof, Grey shall credit
to a bookkeeping account for the benefit of ▇▇▇▇▇ (the "Pension
Account") an amount equal to $1,160,000 (less any amounts then required
to be withheld by Grey for Medicare or other taxes, unless such amounts
are deducted by Grey from amounts otherwise payable to ▇▇▇▇▇, which
amounts shall be so deducted by Grey to the extent available), and as
of the beginning of each month (commencing with May 1998 through and
including December 2002), provided ▇▇▇▇▇ is then employed by Grey, Grey
shall credit to the Pension Account an amount equal to $30,000 (less
any amounts then required to be withheld by Grey for Medicare or other
taxes unless such amounts are deducted by Grey from amounts otherwise
payable to ▇▇▇▇▇, which amounts shall be so deducted by Grey to the
extent available). At the same time, or as soon as practicable
thereafter, an amount equal to the amount of such credits shall be
transferred by Grey to a sub-account (the "Sub-Account") created under
the Trust established by Grey pursuant to the Trust Agreement ("Trust"
and "Trust Agreement" shall have the meanings ascribed to such terms
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in the Amendment and Extension Agreement dated as of March 22, 1995,
between Grey and ▇▇▇▇▇), and such amounts shall be invested in
accordance with the terms of the Trust Agreement. The Pension Account
and the Sub-Account shall be debited with amounts representing all
losses of and distributions from the Trust attributable to such
Sub-Account and shall be credited with all earnings of and deposits to
the Trust attributable to such Sub-Account.
(b) In the event ▇▇▇▇▇'▇ employment with Grey terminates for
any reason prior to December 31, 2002, Grey shall pay to ▇▇▇▇▇ (or, in
the case of ▇▇▇▇▇'▇ death, to his estate), in a cash lump sum within
thirty (30) days following such termination, the balance then held in
the Sub-Account. For purposes of this paragraph (b), ▇▇▇▇▇'▇ Disability
under Section 6 hereof during the term of this Agreement shall not be
treated as a termination of employment and, in such event, the balance
in the Sub-Account shall be payable in accordance with this paragraph
(b) upon ▇▇▇▇▇'▇ death or in accordance with paragraph (c) below upon
the expiration of the term of this Agreement, as applicable.
(c) Subject to paragraph (d) below, upon ▇▇▇▇▇'▇ retirement
from Grey at December 31, 2002, ▇▇▇▇▇ shall be entitled to receive from
Grey a supplemental pension equal to $40,000 per month, payable in cash
during the first week of each month commencing January 2003 through and
including the month in which occurs ▇▇▇▇▇'▇ death (the "payout
period"); provided, however, that if the balance in the Sub-Account as
of the end of any month within the payout period is less than $300,000
(after taking into account the amounts to be deducted pursuant to
paragraph (e) below), then the remaining balance in the Sub-Account
shall be paid to ▇▇▇▇▇ during the first week of the next succeeding
month. In the event of ▇▇▇▇▇'▇ death prior to full payment of the
Sub-Account, Grey shall pay to ▇▇▇▇▇'▇ estate in cash, as soon as
practicable following ▇▇▇▇▇'▇ death, the balance held in the
Sub-Account immediately prior to such payment.
(d) Upon the occurrence of a Change in Con-
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trol of Grey (as defined in Section 10(b) of this Agreement) during the
payout period, Grey shall pay to ▇▇▇▇▇, as soon as practicable
following such Change in Control of Grey, the balance held in the
Sub-Account immediately prior to such payment.
(e) Notwithstanding anything to the contrary contained in this
Section 4, there shall be deducted from any lump sum payments payable
to ▇▇▇▇▇ (or his estate) or, in the case of monthly payments to ▇▇▇▇▇
pursuant to paragraph (c) above, there shall be deducted from the final
payment(s) which would otherwise be made to ▇▇▇▇▇, the sum of the
following amounts (such sum being hereinafter referred to as the
"Deducted Amount"), except to the extent that the Deducted Amount is or
has been deducted by Grey from amounts otherwise payable to ▇▇▇▇▇:
(1) the costs of the Trust solely attributable
to the administration of the Sub-Account,
which costs shall be determined by the
trustee of the Trust (i) on an annual basis
as soon as practicable following the end of
each calendar year (commencing with 1998)
and (ii) as soon as practicable following
▇▇▇▇▇'▇ death or the occurrence of a Change
in Control of Grey during the payout period,
for the period from the beginning of the
calendar year in which occurs ▇▇▇▇▇'▇ death
or such Change in Control of Grey (as the
case may be) to and including the date of
any lump sum payments to ▇▇▇▇▇ or ▇▇▇▇▇'▇
estate hereunder.
(2) an amount equal to (i) the interest,
determined separately from the date of
payment of the income tax liabilities
referred to below to the date of the lump
sum payment or final monthly payment(s) to
or in respect of ▇▇▇▇▇ referred to above
(whichever is applicable), on Grey's
aggregate income tax liability attributable
to net
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realized earnings on the Sub-Account in
excess of seven percent (7%) in any year
(based on the average of the balances in the
Sub-Account at the beginning of each month
in such year, excluding, in the case of
1998, the months of January through April
and without regard to any earnings or losses
during such year), such amount to be reduced
(but not below zero) by (ii) the interest,
determined separately from the date Grey
realizes a tax benefit in respect of the
losses referred to below to the date of the
lump sum payment or final monthly payment(s)
to or in respect of ▇▇▇▇▇ referred to above
(whichever is applicable), on any tax
benefits realized by Grey in respect of net
realized losses on the Sub-Account in any
year. Interest hereunder shall accrue
annually (i.e., shall be determined at the
end of each calendar year and at the date of
final payment(s) to or in respect of ▇▇▇▇▇
pursuant to this Section 4) at a rate equal
to Grey's returns on short-term cash during
such year (or during the period to such
final payment date, as the case may be).
(3) the aggregate amount paid (in excess of
amounts otherwise withheld by Grey in
accordance with applicable law from payments
due to ▇▇▇▇▇) by Grey for Medicare or other
similar taxes in respect of net earnings on
the Sub-Account in excess of seven percent
(7%) in any year (based on the average of
the balances in the Sub-Account at the
beginning of each month in such year,
excluding, in the case of 1998, the months
of January through April and without regard
to any earnings or losses during such year),
plus interest thereon, from the date of
payment of such taxes to
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the date of the lump sum payment or final
monthly payment(s) to or in respect of ▇▇▇▇▇
referred to above, such interest to accrue
annually (i.e., to be determined at the end
of each calendar year and at the date of
final payment to or in respect of ▇▇▇▇▇
pursuant to this Section 4) at a rate equal
to Grey's returns on short-term cash during
such year (or during the period to such
final payment date, as the case may be).
As soon as practicable following the end of each calendar year
commencing with 1998 (and prior to the final payment(s) to or in
respect of ▇▇▇▇▇ pursuant to this Section 4), Grey shall provide to
▇▇▇▇▇ a written statement setting forth in reasonable detail the
computation of the Deducted Amount as of the end of such year (or as of
the date of such final payment(s)), including any changes from the
Deducted Amount set forth in the immediately preceding written
statement provided hereunder. To the extent that the funds in the
Sub-Account at any time are less than the Deducted Amount, then any
shortfall shall be paid to Grey by ▇▇▇▇▇ (or his estate) as soon as
practicable following determination of such shortfall.
(f) The obligations of Grey hereunder shall constitute general
obligations and all payments shall be made from general assets and
property of Grey; provided, however, that it is expressly understood
that Grey's obligations under this Section 4 shall be limited to the
funds held in the Trust and reflected in the Sub-Account, as debited
and credited in accordance with this Section 4, and that Grey shall
have no obligation to pay amounts other than from such funds. Nothing
contained herein shall give ▇▇▇▇▇ any rights which are greater than
those of a general creditor of Grey nor create or be construed to
create a trust or fiduciary relationship of any kind.
4. Status of Current Agreement. This Amendment shall be
effective as of day and year first above written, and, except as set forth
herein, the Current
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Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals as of the day and year first above written.
GREY ADVERTISING INC.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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